Test-5 Flashcards
With SEBI (Foreign Portfolio Investors) Regulations, 2014 – Government of India merged existing three investor classes of —-,—,— and created —–.
“FII”, “Sub-accounts” & “QFI”- “FPI” – Foreign Portfolio Investor
An individual FPI cannot own more than —- of —– in a company (It is the amount of money a company received during —).
10%-paid up capital- IPO
The FPIs are allowed to invest across a host of the capital market segments, including in shares, debentures, warrants, mutual funds, collective investment schemes, derivatives, commercial paper and government securities.
All FPI’s — cannot hold more than —- of paid up capital of an Indian Company unless the —- of the company passes a resolution to raise the ceiling to sectoral Cap. —–enforces FPI limits based on data received from SEBI/NSDL andCDSL.
collectively-24%- Board of Directors- Reserve Bank of India .
This limit or cap can be modified by govt according to the needs of each sector.
Difference betw FDI and FPI-
- FDI is —- term invstmnt and FPI is —-.
- FDI invests in —- and FPI in—-.
- Aim of FDI is —- and FPI is —-.
- FDI leads to — and FPI leads to —-.
- FDI flows into —- market and FPI in—-.
- Entry and exit are —- in case of FDI than FPI.
- FDI is eligible for —- and FPI for —-.
- —- tend to more speculative than —.
- FDI creates direct impact on —– whereas FPI —-. in case of —- there is also fleeting interest in mgmt.
Both FDI and FPI are thus described as ——-, and hence involve no payment obligations.
FDI is long-term invstmnt and FPI is short term.
- FDI invests in physical assets and FPI in financial assets.
- Aim of FDI is to increase enterprise capacity, productivity or change in mgmt control and FPI is capital availability.
- FDI leads to tech transfer, access to markets and mgmt inputs and FPI leads to capital inflows.
- FDI flows into primary market and FPI in secondary markets.
- Entry and exit are relatively harder in case of FDI than FPI.
- FDI is eligible for profits of the company and FPI for capital gains.
- FPIs tend to more speculative than FDI.
- FDI creates direct impact on employment of labour and wages which is not possible in case of FPI. FPIs also dont show any interest or fleeting interest in mgmt.
- non –debt creating and therefore no payment obligations.
InvITs are set up as a—- and registered with —-.
- InvITs short for Infrastructure Investment Trusts. They are really similar to REITs funds- pool in small sums of money from investors- which is then used as an investment in an Infrastructure project which will ensure—–.
- InvITs can basically invest in infrastructure projects, either ——or through an —.
- In the case of Public-Private Partnership, InvITs can only —–. InvITs just like REITs is governed by—-. InvITs can be bought in an —- for 10 years or more. The minimum amount of investment is —.
Trust- SEBI- smooth cash flow- directly- SPV- be done through SPVs- SEBI through SEBI (Infrastructure Investment Trusts) Regulations, 2014- IPO- Rs. 10 Lakh.
Side note- RBI can keep policy rate high based on - 1. Inflation in the economy is high
2.Inflation expectation in the economy is high
PPP is an economic theory that compares different countries’ currencies through a —- approach.
According to this concept, two currencies are in equilibrium—known as the currencies being at par—
when a basket of goods is —–in both countries, taking into account the—–.
Therefore the two countries are said to be at PPP when, PPP exchange rate is equal to —–.
“basket of goods”- priced the same- exchange rates- Nominal exchange rate
Determinants of Exchange Rates • Differentials in Inflation • Differentials in Interest Rates • Current Account Deficits • Public Debt • Terms of Trade • Strong Economic Performance
The FIPB was the inter-ministerial body — or a single window clearance mechanism for applications on —– in India in sectors under the ——.FIPB was —- , so now the work will be done by —— in consultation with —- by setting up SOP for processing of applications.
Foreign direct investment (FDI)- government approval route- Abolished- Concerned ministries and depts in consultation with DPIIT- min of commerce.
As per —-regulations, FPIs are not allowed to invest in —- and investment in unlisted entities will be treated as —-.
Any —- investment by non-residents which is less than or equal to —–in a company is portfolio investment.
FPI can be done in both — and—-. FPI may also happen through —- market. However, a single investor can —– in a given company.
SEBI- unlisted shares- FDI- equity- 10% of capital- Equity shares and debt securities- primary market - Either under FPI or under FDI, but not both.
Acc to revised KYC norms by —, now, —–,—- and —- can also be a part of —-. However their aggregate holding in such an overseas fund should be —- of —. and individual share cant exceed —- in an FPI.
FPIs can be controlled by investment managers that are —- by NRIs, OCIs or RIs. Such, investment managers need to be properly regulated in their home jurisdiction and also registered with the —- which means dual registration and regulation..
NRIs, OCIs, RIs i.e. resident Indians- FPI- less than 50% of the corpus fund- 25% in an FPI- owned or controlled- SEBI.
Which of the following constitute Capital Account in Balance of Payment (BoP)?
- Global Depository Receipts (GDRs)
- International Trade Credit
- Government securities purchased by foreign Investors
- Transfer payments
- Securities purchased by foreign portfolio investors
Those transactions come under Capital Account (BoP) which creates future obligations/ liabilities or change in assets/liabilities. For example loans, shares, deposits etc. Global Depository Receipts (GDRs) are basically shares issued abroad by a domestic company through banks. Trade Credit means credit/loan given for trade purpose. Securities are basically financial assets, so it will always be included in Capital Account.
So, all are part of Capital Account of BoP
The idea of self sufficiency and no intn trade- —–.
Autarky
India has full —- convertibility and partial —- convertibility.
Current account- Capital account.
RBI has —-interest rate on term/ time deposits and interest rate on savings deposits .
RBI regulates three categories of financial markets-
deregulated - money markets, government securities markets and foreign exchange markets.
True or false-
In SARFAESI act, only the securities of loans with collaterals can be sold by banks and fin institutions. And only when such loans become NPAs.
True
—- helps banks and financial institutions to recover bad loans effectively. This is possible only in the case of — loans, for —- loans banks can go to the courts. Thus it makes court intervention unnecessary in case of —- loans.
SARFAESI act,2002- Secured loans- unsecured loans- secured loans.
