Examine the following statements and choose the correct answer : Statement - I : FIIs do not invest in unlisted securities. They participate only through Stock Exchanges. Statement - II : FIIs cannot invest at the time of initial allotment. Codes :
Both the statements are wrong
Under the SEBI (Foreign Institutional Investors) Regulations, 1995, which governed FIIs until the SEBI (Foreign Portfolio Investors) Regulations, 2014 took over from June 2014, a registered FII could invest in shares, debentures and warrants of companies that were unlisted, listed or to be listed, in both the primary and the secondary market, as well as in units of schemes, government securities and commercial paper within limits.
Statement I: FIIs were not confined to stock exchange trades; they could buy unlisted securities and take part in private placements. So the statement is wrong.
Statement II: FIIs could apply in public issues and receive shares at the initial allotment, typically by bidding in the QIB portion of IPOs. So this statement is also wrong.
Both statements therefore misstate the investment rules for FIIs.
Hence, Both the statements are wrong.
Similar Questions
In India, NIFTY and SENSEX are calculated on the basis of :
The world’s first electronic stock market is :
ADRs’ and GDRs’ are an excellent means of investment to invest in India for
Statement I : FIIs do not invest in unlisted entities. They participate only through stock exchanges.
Statement II : FIIs cannot invest at the time of initial allotment.
Select the correct code :
Codes :
In which of the following Stock Exchanges the GDR’s are listed ?
(i) London Stock Exchange
(ii) New-York Stock Exchange
(iii) Luxembourg Stock Exchange
(iv) Bombay Stock Exchange
(v) Singapore Stock Exchange
(vi) Hong Kong Exchange
Identify the correct combination :
Assertion (A) : Investors in capital market seem to be inclined for fixed income securities.
Reason (R) : Debt instruments now have active secondary market.
Codes :
Underwriters of the security issues are required to
Match the various stock exchanges in List – I with the years of their establishment in List – II as follows and suggest the correct code :
List – I List – II a. National Stock Exchange (NSE) i. 1875 b. MCX Stock Exchange (MCX-SX) ii. 1992 c. Bombay Stock Exchange (BSE) iii. 2000 d. Interconnected Stock Exchange of India (ISEI) iv. 2008 Codes :
a b c d
Secondary market intermediaries for corporate securities in India are
I. Investors
II. Jobbers
III. Brokers and sub-brokers
IV. Portfolio consultants
Codes :
Important Questions from Capital Market
The following two statements relate to receivables management. Choose the correct code for the statements being correct or incorrect.
Statement I: The major controllable decision variables for deciding the credit policy are the credit standards and analysis and the credit terms only.
Statement II : Factoring is a popular mechanism of managing, financing and collecting receivables.
The following two statements relate to financial derivatives. Choose the correct code for the statements being correct or incorrect.
Statement I: When an option is allowed to be exercised only on the maturity date, it is called an American option.
Statement II : If the option holder does not lose or gain whether he exercises his option or buys or sells the asset from the market, the option is said to be at-the-money.
The given statements are related to financial derivatives. Choose the correct code for the statements being correct or incorrect.
Statement I: A speculator will gain, if he sells foreign currency under a forward contract, when the spot price is higher than the forward price.
Statement II : In currency futures, intra currency spread exists when a speculator buys/sells the same currency for two delivery dates.
Indicate the correct code for the following two statements of Assertion (A) and Reasoning (R):
Assertion (A): Investors in the capital market now have a higher inclination for investment in debentures.
Reasoning (R): Debentures have active secondary markets now.
Authorised capital of a company is Rs. 5 lacs; 40% of it is paid up. Loss incurred during the year is Rs. 50,000. Accumulated loss carried from last year is Rs. 2 lac. The company has a Tangible Net Worth of:
