Business Daily from THE HINDU group of publications
Thursday, Oct 25, 2007
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Business Daily from THE HINDU group of publications Thursday, Oct 25, 2007 ePaper | Mobile/PDA Version |
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Foreign Institutional Investors Markets - Regulatory Bodies & Rulings
The SEBI Chairman, Mr M. Damodaran, at the 34th annual convention of Department of Business Economics of the University of Delhi on Wednesday. Our Bureau New Delhi, Oct 24 On the eve of a crucial board meeting to decide on the future scope of P-Notes issuance in the Indian capital market, the Securities and Exchange Board of India Chairman, Mr M. Damodaran, has said that all the 20 P-Note issuing proprietary sub-accounts have expressed intent to convert into foreign institutional investor (FII) status. An FII registration would result in their investments coming into the Indian capital market directly through the “front door”. They (proprietary sub-accounts) have all sent their letter of intent within the 24-hour deadline that was mentioned by the SEBI, Mr Damodaran told reporters on the sidelines of an annual convocation event here today. The 24-hour deadline was imposed on Monday. “Everyone that we expected would write to us has written. Those sub-accounts that were issuing P-notes have all applied for conversion,” Mr Damodaran said. There are 34 P-Note issuing entities in the country, of which some are already FIIs. This number was 14 in March 2004. Proprietary sub-accounts have opted to convert into FIIs because the proposed measures unveiled by the capital market regulator seeks to prohibit them (sub-accounts of FIIs) from further issuance of offshore derivative instruments (ODI), including P-Notes, with immediate effect. The SEBI board would meet on Thursday to discuss and approve the proposed measures that seek to restrict the issuance of P-Notes. The board may also discuss ways and means for simplifying the norms for FII registration. Also the expert committee report on making Mumbai an international financial centre will be discussed. On whether the proposals announced are to be passed with some modifications, Mr Damodaran said that he cannot guess as to what would happen in the meeting. “Tomorrow the board is meeting and the board would decide,” he added. SEBI had last week proposed measures to restrict the issuance of P-Notes to overseas investors. The Finance Minister, Mr P. Chidambaram, had said that these measures were intended to moderate the surge in capital flows even as the SEBI had a slightly different take on why the measures were proposed. Meanwhile, the SEBI Chairman today rejected suggestion from a section of academia that a separate corpus be created to act as a counterbalance in situations where the market was moving southwards. Sub-accounts get 1 week to register as FIIs Why Participatory Notes are dangerous Participatory note policy driven by a short-term view of market More Stories on : Foreign Institutional Investors | Regulatory Bodies & Rulings
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