Foreign institutional investors (FIIs) are institutions like pension funds, mutual funds, and asset management companies based in foreign countries that can invest in Indian financial markets. FIIs were first allowed to invest in India in 1992 and have contributed significantly to the country's stock markets since then. They primarily invest through equity, but also invest in government bonds and debt securities of Indian companies. Some FIIs that are not registered with Indian markets use participatory notes, which are derivatives that allow anonymous investment in Indian stocks through brokerage houses.