SEBIs New Policy on P Notes

Sebi announces new P-Note policy

M Damodaran, Chairman, Sebi, while announcing the decision on the new policy on P-notes said that this was not a board meeting to decide on a single issue.

Speaking to mediapersons after the Sebi board meet today, he said the stock exchanges would be mandated to constitute a committee chaired by a non-executive member of a concerned exchange to focus on surveillance. This, he feels, would make the market a safer place for investors.

The meet also saw new policy announcements like clearing of Sebi's proposal to have an SME exchange.

But the most awaited decision on P-notes was that the board has decided that FIIs and sub-accounts shall not issue P-Notes as underlying as derivatives.

"All current position to be wound up within 18 months. Further issue of PNs by sub-accounts will be discontinued with immediate effect," Damodaran said.

Highlights of M Damodaran's announcements at the Sebi Press Conference:

Sebi board cleared proposal to have a separate exchange for SME Segment
Date of calculation of AUC will be Sept 30
Sub accounts not to be allowed to issue PNs
PNs can't be issued with ODIs as underlying
FIIs shall not issue P-notes as underlying as derivatives has been approved
Current position to be wound up within 18 months
Board has decided further issuance of P-notes by sub accounts of FIIs to be discontinued with immediate effect
Sub accounts issuing P-notes have applied for registration of FIIs: Sebi
Until a final decision is taken on their being FIIs, sub accounts can continue as normal
Both proprietary and corporate sub-accounts will be allowed to do business till final decision is announced.

Further, View: Sebi announces new P-Note policy

Sub-accounts cannot issue P-notes: SEBI

Mkts have factored in Sebi news: Experts

Positives and negatives of new P-note policy

The new P-note policy was announced by Sebi Chairman M Damodaran, at the Sebi headquarters today. The following were the positive and negative points that emerged:

NEGATIVES:

Date of calculation of AUC to be Sep 30

PNs can be issued only to regulated entities and not registered entities as per FII rules of 2004

POSITIVES:
Both proprietary, corp sub A/Cs can continue till final decision

Broad based entities with atleast 20 investors, no single investor can hold more than 49% (vs10% before)

Fund manager should have 1-yr track record, not the fund

Pension funds, charities, endowments to be considered separate category


SEBI has the last word on P-Notes




We thank (will be grateful to) the owners of the above articles/sites/sources/Govts www.theeconomictimes.com www.myiris.com www.moneycontrol.com allowing/referring this. We are just providing the link/information of business updates from the leading sources for the benefit of readers.