New Delhi, Jan 14 (PTI) Overall investments into theIndian capital market through participatory notes (P-notes)fell to Rs 1.28 lakh crore at November-end after witnessing arise in the previous month.
P-notes are issued by registered foreign portfolioinvestors to overseas players who wish to invest in theIndian capital market without registering themselves directly.
They, however, need to go through due diligence.
Total value of P-notes investment in Indian markets-- equity, debt and derivatives -- declined to Rs 1,28,639crore at November-end from Rs 1,31,006 crore at the end ofOctober, according to market regulator Sebi data.
P-note investments were on a decline since June and hitan over eight-year low in September; however, it climbed upin October. This decline was in view of stringent norms put inplace by the Securities and Exchange Board of India (Sebi).
Of the total investments in November, P-note holdings inequities were at Rs 92,846 crore and the remaining in debt andderivatives markets.
Besides, the quantum of FPI investments via P-notesdipped to 4 per cent, during the period under review, from 4.1per cent in the preceding month.
Over the past few months, Sebi has taken several measuresto stop the misuse of the controversy-ridden participatorynotes. In July, the markets regulator notified stricter P-notes norms stipulating a fee of USD 1,000 that would belevied on each instrument to check any misuse for channelisingblack money.
Also, Sebi prohibited FPIs from issuing such notes wherethe underlying asset is a derivative, except those which areused for hedging purposes.
The move was a follow-through of Sebi's board approval ofa relevant proposal in June. These measures were an outcome ofa slew of other steps taken by the regulator in the recentpast.
In April, Sebi had barred resident Indians, NRIs andentities owned by them from making investment through P-notes.
The decision was part of efforts to strengthen the regulatoryframework for P-notes, which have been long seen as beingpossibly misused for routing black money from abroad. PTI SPMKJ.
This is unedited, unformatted feed from the Press Trust of India wire.