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Which of the following statements is/are correct about the 'Foreign Institutional Investment'?
1. They can invest in both the listed and unlisted entities.
2. They can invest at the time of initial allotment.
3. They can involve in the direct management of the enterprise.
Select the correct answer using the code given below.
  • a)
    1 and 2 only
  • b)
    2 only
  • c)
    3 only
  • d)
    2 and 3 only 
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
Which of the following statements is/are correct about the Foreign Ins...
  • As per Section 15 (1) (a) of the SEBI FII Regulations, 1995, a Foreign Institutional Investor (FII) could invest in the securities in the primary and secondary markets including shares, debentures and warrants of companies unlisted, listed or to be listed on a recognized stock exchange in India. However, subsequent to SEBI (FPI) regulations, FIIs are allowed to invest only in listed or to-be listed entities and only through stock exchanges. Hence statement 1 is not correct.
  • Foreign investors investing in initial allotment of shares (say IPOs or when a group of entities come together to float a company) are categorized as FDIs, this is a myth. In fact FIIs are very active in the over the counter (OTC) markets and in the Initial Public Offering market in India. Hence statement 2 is correct.
  • Consolidated FDI Policy of Department of Industrial Policy and Promotion (DIPP) states that “foreign Direct Investment, as distinguished from portfolio investment (FII), has the connotation of establishing a ‘lasting interest’ in an enterprise that is resident in an economy other than that of the investor”. FII cannot involve in the direct management of the enterprise. Hence statement 3 is not correct.
     
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Which of the following statements is/are correct about the Foreign Institutional Investment?1. They can invest in both the listed and unlisted entities.2. They can invest at the time of initial allotment.3. They can involve in the direct management of the enterprise.Select the correct answer using the code given below.a)1 and 2 onlyb)2 onlyc)3 onlyd)2 and 3 onlyCorrect answer is option 'B'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Which of the following statements is/are correct about the Foreign Institutional Investment?1. They can invest in both the listed and unlisted entities.2. They can invest at the time of initial allotment.3. They can involve in the direct management of the enterprise.Select the correct answer using the code given below.a)1 and 2 onlyb)2 onlyc)3 onlyd)2 and 3 onlyCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following statements is/are correct about the Foreign Institutional Investment?1. They can invest in both the listed and unlisted entities.2. They can invest at the time of initial allotment.3. They can involve in the direct management of the enterprise.Select the correct answer using the code given below.a)1 and 2 onlyb)2 onlyc)3 onlyd)2 and 3 onlyCorrect answer is option 'B'. Can you explain this answer?.
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