A Qualified Institutional Buyer (QIB) is an institutional investor that is considered to be sophisticated and knowledgeable enough to invest in securities without the need for the same level of regulatory protection as other investors.
The SARFAESI Act defines a QIB as “any person who satisfies the following conditions, namely:
(a) is a financial institution; or (b) is a non-banking financial company; or (c) is a foreign institutional investor; or (d) is a venture capital fund; or (e) is a mutual fund; or (f) is an insurance company; or (g) is a provident fund; or (h) is a pension fund; or (i) is a university or college endowment fund; or (j) is a charitable trust; or (k) is a Government owned investment institution; or (l) is a State owned investment institution; or (m) is a consortium of any of the entities mentioned in clauses (a) to (l)”.
MCQs
- Who is a Qualified Institutional Buyer (QIB) under the SARFAESI Act?
- A financial institution
- A non-banking financial company
- A foreign institutional investor
- All of the above
Answer: All of the above.
- What are the benefits of being a QIB under the SARFAESI Act?
- QIBs can invest in securities without the need for the same level of regulatory protection as other investors.
- QIBs can access a wider range of investment opportunities.
- QIBs can enjoy lower transaction costs.
Answer: All of the above.
- What are the responsibilities of a QIB under the SARFAESI Act?
- QIBs must comply with the securities laws and regulations.
- QIBs must disclose their investment activities to the Securities and Exchange Board of India (SEBI).
- QIBs must act in a fair and transparent manner.
Answer: All of the above.
- What are the consequences of a QIB violating the SARFAESI Act?
- The QIB may be penalized by the SEBI.
- The QIB may be debarred from investing in securities.
- The QIB may be held liable for any losses incurred by investors.
Answer: All of the above.
Answers
- All of the above.
- All of the above.
- All of the above.
- All of the above.