Mumbai, The Securities and Exchange Board of India has started receiving feedback from market participants on its proposal to restrict foreign portfolio investments through participatory notes (PN), said Mr G. Anantharaman, its Whole-Time Director. The SEBI board, which is scheduled to meet on October 25, is expected to evaluate the response.
Mr Anantharaman said SEBI’s proposal on the PN is made keeping in mind the interest of investors.
Addressing an investors’ conference here today, Mr Anantharaman made it clear that what the regulator had done is part of its efforts to make the dealings in the market more transparent. PNs allow foreign funds to invest in Indian stock market without having to register with SEBI. The regulator, in a discussion paper released on Tuesday, proposed to restrict FII investments through P-Notes, an offshore derivative instrument, by FIIs.
Efficient market
Mr Anatharaman clarified that there was no suggestion, or intention, to abolish participatory notes.
He said SEBI’s intention is “to create efficient markets in terms of disclosures, transparency and compliance of clause 49.” Some of the initiatives SEBI has taken include fast track issuance of securities to provide a faster and cost effective method of raising capital by listed companies, he said
Regulations
He said SEBI has in place a draft regulation for investment advisors which is benchmarked with international regulations. “SEBI is also equally committed to investor education and investor protection and has created an Investment Protection & Education Fund with a corpus of Rs 10 crore.”
