subject: Do You Want to Invest in India? Who And How did Investment in India? [print this page] As the prices of Indian stocks are in new highs every week, many are looking to the Indian stock market to foreign private investment. During the recent recession, many ordinary people especially in the United States have made significant losses on their investments in their small market share of investments. But many insiders and large Investment Funds have used the recession as a gift from God. Their profits have increased several times and now many of them have become foreign institutional investors (FII) in emerging markets such as the Indian stock market. Many ordinary people from the west do not know where to invest, and also seek new pastures for their investments. This guide is to protect human rights.
Currently, India does not allow foreign individuals to invest directly in the stock market. Those who are high net worth $ US50 million may be registered as sub-accounts of an FII. For portfolio investments in India, you must be registered either as a foreign institutional investor (FII) or as one of the sub-accounts of FIIs registered in India. Both recordings are granted by the market regulator SEBI (government agency), India. Foreign institutional investors are primarily composed of mutual funds, pension funds, endowments, sovereign wealth funds, insurance companies, banks, asset management, etc.
Foreign institutional investors and their sub-accounts may invest directly in securities listed on an exchange. Investment by a single FII in any given society should not exceed 10% of paid up capital of the company. Regulations permit a separate limit of 10% on investment for each sub-account of FII in a given society. Foreign entities and individuals may be exposed to Indian equities to institutional investors.
Many India-based mutual funds are becoming popular among Fund investors. Investment could also through offshore instruments such as participatory notes (PNS) and certificates of deposit, such as American Depositary Receipts (ADRs), Global Depositary Receipts (GDRs) and exchange traded funds (ETFs) and notes Exchange traded (ETN). However, even small investors can invest in American Depositary Shares representing underlying some of the well known Indian companies listed on the New York Stock Exchange and Nasdaq. ADRs are denominated in dollars and subject to the regulations of the U.S. Securities and Exchange Commission (SEC). Similarly, certificates of deposit are listed on European stock exchanges..
Major U.S. funds investing in India are India Franklin Templeton Mutual Funds, Morgan Stanley India Mutual Fund which is a subsidiary of Morgan Stanley parent company based in the U.S., Alliance Capital Mutual Fund which is a subsidiary of Alliance Capital Management Corporation, Delaware (USA). Prudential ICICI Mutual Fund is a joint venture between prudential plc. U.S.
Most trade on the Indian stock market is paperless and takes place on two stock exchanges -. The Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) and both follow the same mechanisms of negotiation, trading hours, etc. Currently the settlement process, BSE had approximately 4,700 listed companies, while rival NSE was about 1,200. Among all companies listed on the BSE, only about 500 companies representing over 90% of market capitalization and are considered highly traded shares. The two exchanges compete for order flow, which leads to lower costs, market efficiency and innovation.
Trading on both exchanges is a limit order to open book in which electronic order matching is done by exchanging information. There are no market makers or specialists and the whole process is order-driven, which means that orders placed by investors on the market are automatically compared with the best limit orders. Therefore, buyers and sellers remain anonymous. The advantage of an order driven market is that it provides greater transparency by publishing all the orders and the trading system
The delivery of securities shall be made in dematerialized form. Each Trading exchange has its own clearing house, which assumes all risk of regulation by acting as central counterparty. All trade on the stock market takes place 9:55 to 3:30 p.m. Eastern Standard Time in India (+ 5.5 GMT) Monday to Friday.
The overall responsibility of the stock market rests with the Securities & Exchange Board of India (SEBI), a Government of India Agency. If you want to have more information, visit the website of SEBI or E-mail to her. In the last two months, foreign investment, particularly from USA based funding is all-time high U.S$. 6,000, 000, 000 in July and August , 2010.
Do You Want to Invest in India? Who And How did Investment in India?
