Difference between Foreign Portfolio Investment (FPI) and Foreign Direct Investment (FDI) and SEBI
Posted on : 30 Nov 2019Views: 4257
Difference between Foreign Portfolio Investment (FPI) and Foreign Direct Investment (FDI)
- FPI consist of securities and other financial like Bonds, Mutual Funds held by an investor in another country. It does not provide direct ownership of the asset and is relatively liquid. They are basically short term investors.
- FDI lets an investor purchase a direct business interest in a foreign country. They are long term investments.
Securities and Exchange Board of India
- Securities and Exchange Board of India is a government established in 1988 authority which controls the securities market in India. Indian Parliament passed SEBI Act 1992 in 1992 India which made SEBI a statutory body. SEBI functions to fulfill the requirements of the following three categories.
- Issuers –It provides a marketplace in which the issuers can increase finance properly.
- Investors –It ensure safety and supply of precise and accurate information
- Intermediaries –It enables a competitive professional market for intermediaries.
- The headquarters of SEBI is situated in Mumbai. The regional offices of SEBI are located in Ahmadabad, Kolkata, Chennai and Delhi.
Securities and Exchange Board of India is administered by its board of members. The board of SEBI consist of:
- The Chairman by nominated by Government of India
- Two members from finance ministry
- One member from Reserve Bank of India
- Five members nominated by Union Government of India
- To control activities of stock exchange
- To safeguard the rights of stockholders and also to guarantee the security of their investment
- To avoid fraudulence by harmonizing its statutory regulations and self-regulating business.
- To administer and develop guidelines for intermediaries
Article Related Questions
Consider the following statements:
1.Foreign Direct Investment (FDI) is a short term investment whereas Foreign Portfolio Investment (FPI) is a long term investment.
2.Only Ministry of Finance is authorized to issue directions for enhancing the flow of FPIs in India.
Which of the above statements is/are correct?
3.Both 1 and 2
4.Neither 1 nor 2
Right Ans : Neither 1 nor 2