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Tighter transfer norms for P- notes

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The Security and Exchange board of India ( Sebi) has notified new norms restricting transfer of Pnotes to entities authorised for their use and after prior consent from the issuer foreign investor.
Participatory notes or Offshore Derivative Units are issued by Sebi- registered foreign portfolio investors to other overseas entities looking for an exposure to the Indian markets without getting registered directly to save on costs and procedures. However, Sebi has tightened its norms substantially over the years about who can issue and who can subscribe to these instruments, amid long- standing concerns about their possible misuse for laundering of money. The regulator decided on the latest tightening of norms earlier this year after recommendations in this regard were made by the Supreme Court- appointed Special Investigation Team on black Money.
Whilesomeofthenew amendmentstotheregulations governingP- Noteshave already come into effect,Sebi has now notified on emorechange that was approved by Sebisboard recently.
Business Standard New Delhi,14th July 2016

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