FPIs red flag Sebi's plan to curb p-notes

Say it is difficult to differentiate between speculative and hedged positions

Overseas investors have written to the Securities and Exchange Board of India (Sebi), opposing the proposed curbs on participatory notes (p-notes), or offshore derivatives instruments (ODIs).

In a discussion paper floated last month, the market regulator proposed to bar p-notes from taking speculative positions in the derivatives market. Also, the paper talks about levying fees of $1,000 per ODI per subscriber every three years. Sebi has suggested that ODI issuers be given time till December 31, 2020, to wind down any outstanding derivatives exposure taken for a purpose other than hedging.

FPIs have told the regulator that it would be difficult for