Market regulator SEBI announced new rules to regulate foreign investments through instruments like Participatory Notes.
The rules, to be effective from Friday, include no fresh issuance of P-Notes in derivatives as also winding up existing positions in 18 months, besides curbs on such instruments in the spot market.
Ending the debate on the issue, SEBI Board considered the proposals this afternoon and virtually retained all the clauses that the market regulator had put up for public comments last week.
SEBI had taken the views of FIIs on board following a suggestion from Chidambaram. In derivatives, Foreign Institutional Investors (FIIs) and their sub-accounts cannot issue fresh P-Notes and will have to wind up their current position in 18 months, he said.
In spot market, FIIs will not be allowed to issue P-Notes more than 40 per cent of their assets under custody. The reference date for calculating such assets will be September 30, SEBI said.
