diff --git a/compiler/frontend/src/org/jetbrains/kotlin/psi/KtPsiUtil.java b/compiler/frontend/src/org/jetbrains/kotlin/psi/KtPsiUtil.java
index b293ec7dade..7d7003cda32 100644
--- a/compiler/frontend/src/org/jetbrains/kotlin/psi/KtPsiUtil.java
+++ b/compiler/frontend/src/org/jetbrains/kotlin/psi/KtPsiUtil.java
@@ -1,5 +1,5 @@
 /*
- * Copyright 2010-2015 JetBrains s.r.o.
+ * Copyright 2010-2016 JetBrains s.r.o.
  *
  * Licensed under the Apache License, Version 2.0 (the "License");
  * you may not use this file except in compliance with the License.
@@ -782,6 +782,11 @@ public class KtPsiUtil {
             declaration = PsiTreeUtil.getParentOfType(declaration, KtNamedDeclaration.class);
         }
         else if (declaration instanceof KtParameter) {
+            KtFunctionType functionType = PsiTreeUtil.getParentOfType(declaration, KtFunctionType.class);
+            if (functionType != null) {
+                return functionType;
+            }
+
             PsiElement parent = declaration.getParent();
 
             // val/var parameter of primary constructor should be considered as local according to containing class
diff --git a/idea/testData/checker/regression/FunctionTypes.kt b/idea/testData/checker/regression/FunctionTypes.kt
new file mode 100644
index 00000000000..79dfe2ba111
--- /dev/null
+++ b/idea/testData/checker/regression/FunctionTypes.kt
@@ -0,0 +1,24 @@
+fun <K, V> intercept(<warning>block</warning>: (key: K, next: (K) -> V, K) -> V) {
+}
+
+fun <T : (Int) -> String> f() {
+
+}
+
+fun <T> g() where T: (unit: Unit) -> Unit {
+
+}
+
+class C<T : (Int) -> String>() {
+
+}
+
+class CC<T>() where T : (Int) -> String {
+
+}
+
+interface I<T>
+
+val c = object : I<(String) -> String> {}
+
+class CCC() : I<(Int) -> Int>
\ No newline at end of file
diff --git a/idea/tests/org/jetbrains/kotlin/checkers/PsiCheckerTestGenerated.java b/idea/tests/org/jetbrains/kotlin/checkers/PsiCheckerTestGenerated.java
index 2c34070527b..e884a7fee9b 100644
--- a/idea/tests/org/jetbrains/kotlin/checkers/PsiCheckerTestGenerated.java
+++ b/idea/tests/org/jetbrains/kotlin/checkers/PsiCheckerTestGenerated.java
@@ -496,6 +496,12 @@ public class PsiCheckerTestGenerated extends AbstractPsiCheckerTest {
             doTest(fileName);
         }
 
+        @TestMetadata("FunctionTypes.kt")
+        public void testFunctionTypes() throws Exception {
+            String fileName = KotlinTestUtils.navigationMetadata("idea/testData/checker/regression/FunctionTypes.kt");
+            doTest(fileName);
+        }
+
         @TestMetadata("InterfaceDeclarationAsExpression.kt")
         public void testInterfaceDeclarationAsExpression() throws Exception {
             String fileName = KotlinTestUtils.navigationMetadata("idea/testData/checker/regression/InterfaceDeclarationAsExpression.kt");