Can a Non Resident Indians (NRI) make investments by opening a demat account
through QFI Route?
An NRI cannot make investments simultaneously through the QFI route and portfolio
investment scheme (PIS) route. However, a NRI can open demat account as QFI and
make investments through this route provided he has closed all his demat account(s)
opened as an NRI.
Is there any cap on the maximum shareholding limit by QFI?
Yes. The total shareholding by a QFI cannot exceed five percent of the paid up equity
capital of any company at any point of time. This limit shall be applicable to each
class of equity shares having separate and distinct ISIN. Further, the aggregate
shareholding of all QFIs shall not exceed ten percent of the paid up equity capital
of the company at any point of time, in respect of each equity share class having
separate and distinct ISIN.
What are the different ways in which QFI can invest in Mutual Fund units?
QFI has two different options for investing in MF units
- Demat mode – Direct route
- Unit Confirmation Receipt (UCR) – Indirect route
Should QFIs remit funds before making purchase?
Yes. Funds should be received in the single non-interest bearing rupee account of
the QFI before execution of the purchase order. The transactions by QFI are required
to be pre-funded.
Is there any restriction on QFI to open more than one demat account?
Yes. At any point of time a QFI can open only one demat account with any of the
qualified DPs. Further, purchase and sale of all eligible securities should be transacted
through that demat account only.
Is there any restriction on QFI to open more than one trading account?
No. A QFI can open trading account with more than one stock broker. However, all
the transactions of the QFI need to be routed through its qualified DP.
Can a QFI directly place order with a stock broker ?
No. A QFI cannot directly place order with a stock broker. The purchase/sale orders
have to be placed with the qualified DP as provided under circular CIR/IMD/FII&C/3/2012
dated January 13, 2012.
Can the transaction details be modified by QFI?
Yes. The transaction details can be modified by QFI before the execution of such
transaction. For this purpose, the QFI shall communicate the desired modification
to the qualified DP, who, in turn, after his due diligence, will forward the same
How does an eligible person initiate the process to make investment through
An eligible person intending to make investment through QFI route may contact any
of the qualified DP registered with SEBI. The qualified DPs are mandated to perform
the prescribed KYC and ensure fulfillment of the requisite conditions before allowing
the applicant to open a demat account as QFI.
What are the requirements for ongoing KYC of QFIs?
Every QFI shall undergo the same KYC procedure on an ongoing basis, as is applicable
for Indian investors, in the manner as prescribed by SEBI and RBI, from time to
time as well as extant guidelines on KYC procedures for single non-interest bearing
Rupee account opened with AD Category-I bank in India.
Is there any restriction on minimum volume of investment by QFI?
No. There is no restriction on the minimum volume of investment to be made by QFIs.
Does a QFI required to undergo "In Person Verification"?
"In Person Verification" is required in case of individual QFI investors as applicable
for non-resident clients. In case of non-resident clients including QFIs, employees
at the stock broker’s local office, overseas can do in-person’ verification. Further,
considering the infeasibility of carrying out ‘In-person’ verification of the non-resident
clients by the stock broker’s staff, attestation of KYC documents by Notary Public,
Court, Magistrate, Judge, authorized officials of overseas branches of Scheduled
Commercial Banks registered in India, Indian Embassy / Consulate General in the
country where the client resides may be permitted.