Sebi board unlikely to relax curbs on PNs

Market regulator Sebi’s board will take up the review of curbs imposed on participatory notes on August 13, but is unlikely to relax them, said sources. This will be the first review meeting after curbs were imposed on participatory notes last year, sources said, adding, “you don’t expect the first review meeting to relax curbs.” Participatory notes are the instruments through which unregistered foreign players invest in Indian securities. The review of curbs on P-notes will come up around nineand-a-half months after they were imposed by Sebi last year. In October last, the market regulator had asked foreign institutional investors and their sub-agents to wind up existing positions on P-notes in derivatives in 18 months, besides prohibiting them to issue any such fresh instruments. It had also imposed curbs on such instruments in the spot market where FIIs are not allowed to issue P-notes for more than 40% of their assets under custody.