CLSA stops selling P-notes on taxation issue

CLSA, Asia’s leading brokerage group, has stopped selling participatory notes, citing recent uncertainty about taxation of these products, several sources familiar with the situation said.

“CLSA has taken the position not to increase its current Indian P-Note book as a way of minimising the possible tax exposure,” said the brokerage on Tuesday in an email to clients. “For CLSA or any other P-Note issue, the tax liability must rest with the end ODI investor, the end beneficiary of the economic gain,” CLSA added, referring to offshore derivative instruments. A company spokeswoman in Hong Kong declined to comment.