Govt to hold consultations on P-notes; no decision yet: Secy

Admist fears of negative impact of Special Investigative Team (SIT) recommendation of stricter norms for participatory notes (P-notes) on markets, the government today said a view on the suggestions will be taken only after consultations with SEBI, RBI and others.
The Supreme Court-appointed SIT on black money last week recommended a host of measures, including suggesting the securities regulator SEBI to tighten norms related to participatory notes investments into India.
"These are the recommendations given by SIT. We will take views after consultation with stakeholders including Sebi, RBI and related institution. Government will take a considered decision, there is no decision so far," Revenue Secretary Shaktikanta Das said here.

Seeking to calm the jittery markets, he said there should be no uncertainty in market as presently status quo prevails.
"SIT has considered various view points and government will study them and take a view on them. After stakeholder consultation, a view would be taken. There is no need for markets to react in any particular manner," he said.
The SIT had suggested the Securities and Exchange Board of India (SEBI) to put in place regulations to help identify individuals holding participatory notes or offshore derivative instruments (ODIs), and take other steps required to curb black money and tax evasion through the stock market route.

A similar recommendation made in 2007 had triggered a major collapse in the stock market, prompting the then Finance Minister P Chidambaram to announce that no such measures would be taken by the government.

Participatory Notes or P-Notes are instruments issued by registered foreign institutional investors (FII) to overseas investors, who wish to invest in the Indian stock markets without registering themselves with the market regulator.
Das said the Government will go through the SIT recommendations internally and there will not be a delay.
"The report is not going to be put in cold storage, we are going to take a view in few months. It is a complex matter and it will take few months to decide on it," he said.

Meanwhile, spooked by a global fall in equities and concerns over P-notes, stock markets plunged in early session with the benchmark Sensex dropping by over 280 points or 1 per cent.