First QFI has opened acct,says BSE

Govt's efforts to attract investments from QFI may have started yielding results.

The government8217;s efforts to attract investments from Qualified Institutional Investors have started yielding results,albeit slowly,with one QFI opening an account to invest in the markets here.

8220;First account under QFI has been opened,8221; said Bombay Stock Exchange BSE Interim CEO Ashish Kumar Chauhan at an event organised by Assocham here.

He,however,did not identify the QFI.

Recently,a senior Finance Ministry official had said the government expects investment from at least one foreign retail investor from the Gulf region within a month,after having conducted roadshows in the five nations of the region to attract such investments.

A QFI is an individual,group or association resident in a foreign country that is compliant with Financial Action Task Force FATF standards. QFIs do not include FIIs/ sub-accounts.

Meanwhile,Thomas Mathew,Joint Secretary in the Ministry of Finance said the government will seek assistance of US India Business Council USBIC for recognition of QFI in USA.

The Finance Ministry had last month conducted roadshows in five nations in the Gulf region 8212; Riyadh,Dubai,Muscat,Kuwait and Bahrain 8212; projecting India as the 8220;incredible investment destination8221;.

The team led by Economic Affairs Secretary R Gopalan met several potential QFIs,FIIs,wealth funds,PE investors and wealth fund managers and advisors during the road shows.

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The QFIs have also expressed keen interest in the disinvestment programme of the government and sought further details on the disinvestment plan. The sovereign wealth fund of Kuwait 8212; KIA,KIPCO Group 8212; the one of the biggest diversified holding companies in the middle east and North Africa 8212; evinced interest in participating in the disinvestment programme.

The government has budgeted to raise Rs 30,000 crore by way of divesting stake in PSUs in the current fiscal.

According to an estimate,individual foreign investors could bring in about USD 90 billion to India within two years.

In a major initiative to attract foreign capital and stabilise rupee,the government had permitted QFIs from the Gulf nations and EU nations to invest directly in stock markets. A separate sub-limit of USD 1 billion for QFI investment in corporate bonds and mutual fund debt schemes has also been created.

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Earlier,only QFIs from 34 FATF Financial Action Task Force member nations were allowed to directly invest in stocks.

The finance ministry is also working on a tax structure for the QFIs,such that the gains made by these investors be treated at par with the tax treatment given to the foreign institutional investors FIIs.

A short-term capital gains tax of 15 per cent would be deducted at source in case the QFI makes a profit on investment.