Sebi's decision on P-Note to add strength to our markets: Das

Allaying concern that Sebi's move on P-Note may adversely impact market, the Finance Ministry today said it will add strength to markets and genuine investors will find it easy to comply with.
"SEBI Board's decision on P-Notes will add strength to our markets. Genuine investors and p-note holders will find it easy to comply," Economic Affairs Secretary Shaktikanta Das said in a tweet.
P Notes (Offshore Derivative Instruments-ODIs) account for only 10 per cent of assets under custody of FPIs now, compared to 56 per cent in 2007, he said.
P-Notes are typically instruments issued by registered foreign institutional investors to overseas investors, who wish to invest in Indian markets without registering themselves directly in India to save on time.

But, they still need to go through a proper due diligence process.
Tightening its norms to check any misuse of P-Notes for laundering of black money, Sebi today made it mandatory for users of these controversy-ridden overseas instruments to follow Indian anti-money laundering law and report any suspicious transactions immediately.

Acting upon recommendations of the Supreme Court-appointed Special Investigation Team on black money, Sebi also tightened the due-diligence requirements for issuance and transfer of these instruments and put the onus on the original issuer for compliance to Anti-Money Laundering Regulations.
"SEBI Board's decision follows extensive discussion with issuers. Will ensure more transparency in KYC and all related transactions," he said.

After the meeting, Sebi said its board has approved additional measures for the purpose of enhancing the transferability and control over the issuance of ODIs.
Sebi Chairman U K Sinha said the foreign investors have been "persuaded" with regard to the new changes and they are "willing to accommodate" on proposals made by the regulator.