> Eligible Foreign Investor (EFI) FAQ
Eligible Foreign Investor (EFI) FAQ
Who qualifies as an Eligible Foreign Investor (EFI) as per Sebi?
Any foreign entity which is not registered with Sebi as FPI in any of the 3 categories (I, II, and III) is known as Eligible Foreign Investor (EFI)
Currently in which products an Eligible Foreign Investor (EFI) can trade in India International Exchange?
EFI can trade on the derivatives on the following products at India International Exchange
- Equity Index Futures & Options
- Single Stock Futures & Options
- Global Currency Futures & Options
For complete list of products, please refer at the following link:
What are the various benefit that an Eligible Foreign Investor can avail by trading in India International exchange?
Following are the benefits which an EFI / FPI can avail while trading in India International Exchange:
- NO Security Transaction Tax (STT)
- NO Commodity Transaction Tax (CTT)
- NO Long Term Capital Gain (LTCG) tax
- NO Stamp duty
- 22 hours access - opportunity to react to change through investment / hedge / arbitrage across globe and asset class
- Avoid currency risk (transaction and settlement in USD)
- Competitive pricing compared to leading global exchanges
- Capital conservation – single market access across products with cross margin benefits available at India INX
- Comprehensive price and transaction data available real time
Is there any prior approval required for an EFI to trade in India International Exchange?
What are the Know Your Client (KYC) requirement for opening account as an Eligible Foreign Investor (EFI) with Member of India International Exchange?
All the basic documents which are required by Category III FPI, need to be submitted by an EFI to the member of India International Exchange in order to open an account. It mainly includes:
- Certificate of Incorporation
- Articles and Memorandum of Association
- Proof of Address
- Bank Account Details
- Board Resolution stating that entity is allowed to trade
- Shareholding Details
- Authorized Signatories Details
- Financials etc
Is Permanent Account Number (PAN) Card mandatory for an Eligible Foreign Investor (EFI) to trade in India International Exchange?
Yes, an EFI need to have a Permanent Account Number (PAN) before they can start trading in India International Exchange
Can an entity based of a country listed in the specified public statements issued by Financial Action Task Force (FATF) register themselves as an Eligible Foreign Investor (EFI)?
Where can an EFI get the list of Trading Members of India International Exchange?
Is opening a demat account with the depositories is required for an EFI?
Currently only derivatives are available on India International Exchange and it is settled in cash. So there is no requirement of opening a Demat account
What is the trading and settlement currency at India International Exchange?
All the contracts listed in India International exchange are in USD and settlements are also being done in USD. So an EFI don't have to worry about fluctuation in INR, which is the case in Indian domestic exchanges
How can an EFI remit margin to the member to trade in India International Exchange?
EFI can remit fund via SWIFT from their existing Bank account to the bank account of the member which will be at International Financial Service Centre (IFSC)
How can an India INX member remit back funds to EFI?
On the basis of the request from EFI, member will remit the fund via SWIFT from their bank account operated at International Financial Service Centre (IFSC) to the bank account of the EFI. Member will only transfer the fund to the bank account from which they had received the margin from the EFI
Is Anti Money laundering policy applied on the member of India International Exchange?
Yes, all the Prevention of Money Laundering Act (PMLA) guidelines are strictly required to be followed by the member while on boarding the EFI as a client on India International Exchange
Is there any Capital account restriction in International Financial Services Centre (IFSC) for an Eligible Foreign Investor (EFI)?
No, there is no capital account restriction applicable at the exchanges operating in International Financial Services Centre (IFSC)
Is there any internationally renowned arbitration entity available at International Financial Services Centre (IFSC) for arbitration and related dispute resolution services?
Yes, Singapore International Arbitration Centre (SIAC) has their presence in International Financial Services Centre (IFSC)