Take the pledge to vote

For a better tommorow#AajSawaroApnaKal
  • I agree to receive emails from News18

  • I promise to vote in this year's elections no matter what the odds are.
  • Please check above checkbox.

    SUBMIT

Thank you for
taking the pledge

Vote responsibly as each vote counts
and makes a diffrence

Disclaimer:

Issued in public interest by HDFC Life. HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) (“HDFC Life”). CIN: L65110MH2000PLC128245, IRDAI Reg. No. 101 . The name/letters "HDFC" in the name/logo of the company belongs to Housing Development Finance Corporation Limited ("HDFC Limited") and is used by HDFC Life under an agreement entered into with HDFC Limited. ARN EU/04/19/13618
CO-PRESENTED BY
LIVE TV DownloadNews18 App
News18 English
»
2-min read

Sebi to Levy Fee on P-Notes, Bars Speculative Issuance

Markets regulator Sebi on Wednesday tightened P-Note norms by levying a fee of $ 1,000 on each instrument and barred their issuance for speculative purposes to check any misuse for channelising black money.

PTI

Updated:June 21, 2017, 6:13 PM IST
facebookTwittergoogleskypewhatsapp
Sebi to Levy Fee on P-Notes, Bars Speculative Issuance
The Securities and Exchange Board of India (Sebi).
Mumbai: Markets regulator Sebi on Wednesday tightened P-Note norms by levying a fee of $ 1,000 on each instrument and barred their issuance for speculative purposes to check any misuse for channelising black money.

At the same time, Sebi decided to relax the entry norms for foreign portfolio investors willing to invest directly in Indian markets rather than through participatory notes.

However, the regulator is not looking to completely ban these instruments as some new investors tend to use them to test the Indian markets, Sebi Chairman Ajay Tyagi told reporters after its board meeting here on Wednesday.

The new measures, which follow a slew of other steps taken by the regulator in the recent past, come at a time when the value of foreign investments through participatory notes or offshore derivative instruments (ODIs) has already fallen to a four-month low of about Rs 1.68 lakh crore in April-end.

While such investments used to account for more than half of overall foreign portfolio investments at one point of time, their share has now fallen to just 6 per cent. Still, concerns remain that P-Notes are misused by some to channelise black money from abroad into the country through the stock markets.

Tyagi said the board has approved a proposal to tighten the rules for participatory notes through imposition of a regulatory fee on issuers of such instruments.

He, however, added there is no proposal to completely ban these instruments as they can be useful for new foreign investors looking to test the Indian markets.

"Sebi would want foreign investors to come directly but P-notes also have their usefulness," Tyagi told reporters.

The regulator has decided to levy a "regulatory fee" of $ 1,000 on each ODI subscriber, to be collected and deposited by the issuing FPI once every three years, starting from April 1, 2017.

"Sebi shall amend Sebi (FPI) Regulations, 2014 to implement the decision taken by the board," the regulator said.

Also, the board has decided to prohibit ODIs from being issued against derivatives, except those which are used for hedging purposes. The regulator would issue a circular in this regard.

Sebi said quite a few ODI subscribers invest through multiple issuers and the proposed fee will discourage them from taking this route and encourage them to directly take registration as an FPI.

Presently, ODIs are issued against derivatives along with equity and debt. As of April 2017, the ODIs issued against derivatives had a notional value of Rs 40,165 crore, which is 24 percent of the total notional value of outstanding ODIs.

P-Notes are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to be a part of the Indian stock markets without registering themselves directly. They, however, need to go through a proper due diligence process.

In April, the board of Sebi had tightened the norms by barring resident Indians, NRIs and entities owned by them from making investment through P-Notes.

The decision was part of efforts to strengthen the regulatory framework for P-Notes, which have been long seen as being possibly misused for routing of black money from abroad.
| Edited by: Ashish Yechury
Read full article
Next Story
Next Story

Also Watch

facebookTwittergoogleskypewhatsapp
 
 
Most Active
Company Price Change %Gain
Reliance 1,339.80 1.05
Indiabulls Hsg 807.75 -0.83
HDFC 2,114.50 -0.38
SBI 337.55 -2.07
Tata Motors 176.80 -7.02
Company Price Change %Gain
Reliance 1,339.75 1.08
SBI 337.55 -2.05
HDFC Bank 2,403.80 -1.20
Indiabulls Hsg 808.25 -0.35
Tata Motors 176.60 -7.05
Top Gainers
Company Price Change %Gain
Dr Reddys Labs 2,667.00 3.00
Bharti Infratel 276.10 2.43
Britannia 2,848.70 1.70
Reliance 1,339.80 1.05
Titan Company 1,244.40 1.04
Company Price Change %Gain
Reliance 1,339.75 1.08
Bajaj Finance 3,432.65 0.76
HUL 1,783.50 0.62
Top Losers
Company Price Change %Gain
Tata Motors 176.80 -7.02
BPCL 374.45 -4.43
Zee Entertain 347.70 -4.08
IndusInd Bank 1,447.75 -3.14
Adani Ports 387.60 -3.12
Company Price Change %Gain
Tata Motors 176.60 -7.05
Maruti Suzuki 6,857.80 -3.25
IndusInd Bank 1,447.55 -3.02
Bharti Airtel 330.80 -2.66
M&M 638.80 -2.36

Live TV

Countdown To Elections Results
  • 01 d
  • 12 h
  • 38 m
  • 09 s
To Assembly Elections 2018 Results