PN norms not to be tightened further in near future: Govt
Government has no plan in the immediate future to regulate foreign investments through Participatory Notes, Minister of State for Finance P K Bansal said in the Lok Sabha on Friday.
By PTI |
NEW DELHI: Government has no plan in the immediate future to regulate foreign investments through Participatory Notes, Minister of State for Finance P K Bansal said in the Lok Sabha on Friday.
The policies on foreign investment flows are reviewed periodically by the government in consultation with the Reserve Bank and SEBI keeping in mind the macroeconomic situation, changing market conditions and challenges faced in the external sector management, he said in a written reply.
Participatory Notes are instruments issued by Foreign Institutional Investors and their sub-accounts to those not registered with SEBI so that unregulated entities could also make investment in equity markets.
Market regulator SEBI has informed that notional value of outstanding PNs with Indian equities as underlying amounts to Rs 2,68,957 crore as of September 30, 2007, Bansal said.
To regulate issuance of PNs, SEBI had asked FIIs and their sub-accounts not to issue fresh PNs with deriviatives as underlying and wind up the current position in 18 months. Further, SEBI had imposed curbs on PNs issued in spot market.
To another question, Bansal said SEBI had directed stock exchanges to analyse steep falls or rises in the market to detect untoward patterns or skewed concentrations. Preliminary analysis for October does not reveal such findings, he said.
SEBI has informed that Sensex and Nifty moved up by 58.85 per cent and 62.71 per cent respectively till November 15 this fiscal. Bansal said SEBI has been keeping a constant vigil on the market, irrespective of the levels of the market indices and takes action against the concerned entities when required.
It has advised stock exchanges to step up surveillance measures and to initiate expeditious demonstrative action wherever warranted to protect investors' interests and ensure orderly functioning of the stock market, he said.
The policies on foreign investment flows are reviewed periodically by the government in consultation with the Reserve Bank and SEBI keeping in mind the macroeconomic situation, changing market conditions and challenges faced in the external sector management, he said in a written reply.
Participatory Notes are instruments issued by Foreign Institutional Investors and their sub-accounts to those not registered with SEBI so that unregulated entities could also make investment in equity markets.
Market regulator SEBI has informed that notional value of outstanding PNs with Indian equities as underlying amounts to Rs 2,68,957 crore as of September 30, 2007, Bansal said.
To regulate issuance of PNs, SEBI had asked FIIs and their sub-accounts not to issue fresh PNs with deriviatives as underlying and wind up the current position in 18 months. Further, SEBI had imposed curbs on PNs issued in spot market.
To another question, Bansal said SEBI had directed stock exchanges to analyse steep falls or rises in the market to detect untoward patterns or skewed concentrations. Preliminary analysis for October does not reveal such findings, he said.
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SEBI has informed that Sensex and Nifty moved up by 58.85 per cent and 62.71 per cent respectively till November 15 this fiscal. Bansal said SEBI has been keeping a constant vigil on the market, irrespective of the levels of the market indices and takes action against the concerned entities when required.
It has advised stock exchanges to step up surveillance measures and to initiate expeditious demonstrative action wherever warranted to protect investors' interests and ensure orderly functioning of the stock market, he said.
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