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Welcome to SMC QFI Services. Good Opportunity to the Stock markets The QFIs have been mandated to make investments in Indian Mutual funds and Equities.

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Presentation on theme: "Welcome to SMC QFI Services. Good Opportunity to the Stock markets The QFIs have been mandated to make investments in Indian Mutual funds and Equities."— Presentation transcript:

1 Welcome to SMC QFI Services

2 Good Opportunity to the Stock markets The QFIs have been mandated to make investments in Indian Mutual funds and Equities through a SEBI approved Qualified Depository Participant (QDP). SMC is a SEBI registered Qualified Depository Participant (QDP). 6/3/20142

3 Contents Introduction to QFI Products offered to QFI Account Opening Requirements How QFI can invest in Indian equity market Investment Opportunities for QFI Compliance Flow Chart of QFI Trading & Process Order Instructions Formats Primary Market - IPO/MF Process List of Countries for QFIs Investments Sensex Performance 6/3/20143

4 Introduction to QFI Qualified Foreign Investor (QFI) QFI shall mean a person who fulfills the following criteria: a) QFI shall include individuals, corporates, groups or associates. b) He is a resident of a country that is member of FATF (Financial Action Task Force) or a member of a group which is a member of FATF and; a) Resident in a country that is a signatory to IOSCOs MMoU or a signatory of a bilateral MOU with SEBI. a) Such a person is not registered with SEBI as FII or sub-account or Foreign Venture Capital Investor. Securities Exchange Board of India (SEBI) and Reserve Bank of India (RBI) vide Circular No. CIR/ IMD/FII&C/3/2012 and Circular A. P. (DIR Series) No. 66dated 13th January, 2012 respectively have allowed Qualified Foreign Investors (QFIs) to invest directly in the equity share capital of the listed companies in addition to investment in equity and debt schemes of Mutual Funds by opening a demat account with SEBI registered Qualified Depository Participant. 6/3/20144

5 Products offered to QFI Earlier only FIIs / their sub-accounts and NRIs were allowed to directly invest in Indian equity market. In the new dispensation, a large number of Qualified Foreign Investors (QFIs), in particular, a large set of diversified individual foreign nationals and corporate who are desirous of investing in Indian equity market can invest on fully repatriable basis in: Equity Secondary Market – Exchange Traded securities Mutual Funds Equity Primary Market – IPO and FPO Listed Corporate Debts 6/3/20145

6 Accounts Opening Requirements Following documents are required for opening the Equity Trading Account. o Copy of Passport for individual o Registration Certificate for non-individual o Foreign Bank Account Statement (in original) o Overseas Address Proof * All self attested documents should be attested by prescribed Authorities also. 6/3/20146

7 How QFI can Invest in Indian equity market QFIs may invest in the primary and secondary markets on repatriable basis after opening a demat account with QDP (Qualified Depository Participant) QFI shall make Investments through his offshore bank account in a freely convertible foreign currency. QFI may open a single non interest bearing Rupee account with a AD category – I bank in India. QFI shall make all purchase and sale transaction through the QDP only. QFI may engage one or more SEBI registered stock broker and he shall be subject to the extant security laws, rules, regulations, circulars etc. QFI may make divestment by sale on exchanges and repatriation of proceeds from the QFIs Rupee Indian Bank Account to the QFIs offshore Bank Account. 6/3/20147

8 Investment Opportunities for QFIs India is worlds largest democracy with a very sound Legal and Regulatory system. In the last five years FDIs and FIIs have invested over $320bn in Indian market. Qualified Foreign Investors (QFIs) have now been allowed to invest in India in its primary and secondary markets on repatriable basis by simple opening a demat account with QDP like SMC Global Securities Limited. QFI can now directly invest in Indian equity market and can get the edge from the Indian financial growth of about 7-8% of GDP. With two major National Stock Exchanges BSE and NSE and more than 3000 traded securities India has huge investment opportunity. Young Population: More than 60% of the population less than 35 years of age. 6/3/20148

9 Compliance QFI will have to designate his offshore bank account through which all fund transactions shall take place. QFI shall buy or sell through the same QDP only. Only one DP account can be had at a time. QFI shall be subject to laws and regulations of the host country as well as of Indian Laws and Regulations. QFI shall not make short selling or non-delivery trades like future and options. QFI transactions shall be cleared and settled on gross basis. QFI quota for all QFIs taken together in a companys capital is 10% of the paid up capital. Any excess shall have to be mandatory divested on LIFO basis. Individual QFI quota is 5% of the paid up capital of a company. No QFI can exceed this limit. Same set of end/ultimate owners can not have QFI accounts under different corporate edifices. 6/3/20149

10 Charges Schedule Account opening fee ` 5000 Brokerage ` 0.80 on turnover QDP charges ` 0.20 on turnover ` 100 subject to minimum brokerage QDP AMC ` 2500 Bank reporting charges ` 100 per script 6/3/201410

11 Flow chart of QFI trading & Process 6/3/201411 QFIs Foreign Bank A/c QFIs Indian Rupee Bank A/c QFIs Trading and Demat Account

12 - Transaction Process QFI will remit funds in SMCs pool bank account and will issue instructions for purchase of named shares with type of orders and validity in prescribed format. QFI will transfer funds from his single Rupee bank account to QDP & will issue instructions for purchase of shares in prescribed format. SMC-QDP will confirm receipt of funds and forward purchase instructions to SMC- Broking Division for purchase in QFIs trading Account. SMC-Broking Division will send digital contract notes to the QFI. SMC-QDP will settle the Pay-in of funds with SMC-Broking Division for QFIs buying. SMC – Broking Division will place the orders as per the QFIs instructions. And on order matching, SMC – Broking Division will inform the client & demand funds from SMC-QDP as per Contract Note. SMC-QDP will ensure that Securities payout as received from Exchanges credited in the QFIs DP Account on T+2 and send e-confirmation to the client. 6/3/201412

13 - Transaction Process QFI can sell the DP stocks in BSE or NSE. SMC-Broking Division will place orders as per QFIs instructions and confirm to SMC-QDP through online interface / email. After execution of the orders, the SMC-Broking Division will send digital contract notes to the QFI. QFI will instruct SMC-QDP, in prescribed format, to sell any shares held in the DP A/c. SMC – QDP will verify the availability from QFIs DP A/c and forward instructions to SMC-Broking Division. SMC–QDP will ensure that Funds payout as received from SMC-Broking Division is credited in the Rupee Pool A/c of QFI & send e-confirmation to the clients. SMC–QDP will settle the Pay-in of securities with SMC Broking Division for the QFIs selling. 6/3/201413

14 Order Instruction Slip (OIS) from QFI to QDP 6/3/201414

15 OIS (from SMC-QDP to SMC-Broking Division) 6/3/201415

16 Trade Confirmation from SMC-Broking Division 6/3/201416

17 Primary Market IPO /MF Transaction Process QFI may make investments in IPO & Mutual Funds by giving instruction to QDP. SMC-QDP shall apply on QFIs behalf and submit documents and funds to the designated bank. The IPO allotment would directly come into QFIs DP Account and Mutual Fund Units would be allotted to QFIs Folio (Indirect route ) or to be transferred to QFIs DP Account if it is purchased through Direct mode. Mutual fund units can be redeemed but cannot be traded. 6/3/201417

18 List of countries for QFIs Investment 6/3/201418

19 Sensex Super Performer in past decade 6/3/201419 SENSEX `Super Performer in past decade 01-Jan-01 3955.08 Current 16668.01 Return +321 %` SENSEX P/E Ratio Trading at attractive valuations Trading below historic average P/E multiple

20 Sensex P/B Ratio Trading & Market Cap 6/3/201420 SENSEX P/B Ratio Trading at attractive valuations Market Cap to Bank Deposits Indicate under valuations Trading below historic average Market Cap / Bank Deposits Trading below historic average P/B multiple

21 6/3/201421 Disclaimer All stock market based investment is unpredictable and associated with risks. Opinions, recommendations, are only advisory in nature, given with the understanding that the receiver acting on this information assumes all risks involved. QFIs using the process and information contained herein are solely responsible for their actions and the instructions they give to the Broker and Depository. Using our services is at QFI s sole discretion as per QFI guidelines. SMC does not accept any liability whatsoever under any circumstances for use of its QFI services that indicates your acceptance of our disclaimer. SMC shall in no way be responsible for delays in receiving SMS/mails because of service providers delay or force-majeure events. We cannot assume legal liability for any errors or omissions. Contact: Mr Ajay Garg, Director SMC Global Securities Ltd. Cell: +91-9810088761 Delhi - Corporate Office: 11/6B, Shanti Chamber, Pusa Road New Delhi 110005, India Mumbai - Regional Office: Dheeraj Sagar, Ist Floor, Opp. Goregaon sports club, Link Road, Malad (West), Mumbai 400064, India

22 6/3/201422

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