FII (Foreign Institutional Investor)

Investopedia Says:
"The term is used most commonly in India to refer to outside companies investing in the financial markets of India. International institutional investors must register with the Securities and Exchange Board of India to participate in the market. One of the major market regulations pertaining to FIIs involves placing limits on FII ownership in Indian companies."

Foreign Institutional Investor [FII] is used to denote an investor - mostly of the form of an institution or entity, which invests money in the financial markets of a country different from the one where in the institution or entity was originally incorporated.

Institutional investors include hedge funds, insurance companies, pension funds and mutual funds.

FII investment is frequently referred to as hot money for the reason that it can leave the country at the same speed at which it comes in.

In countries like India, statutory agencies like SEBI have prescribed norms to register FII's and also to regulate such investments flowing in through FII's.