{"id":2017,"date":"2010-01-22T15:22:59","date_gmt":"2010-01-22T09:52:59","guid":{"rendered":"http:\/\/www.niftylivecharts.com\/blog\/?p=2017"},"modified":"2010-01-22T15:22:59","modified_gmt":"2010-01-22T09:52:59","slug":"p-notesindian-stock-market-fii","status":"publish","type":"post","link":"https:\/\/www.niftylivecharts.com\/blog\/p-notesindian-stock-market-fii\/","title":{"rendered":"P-notes,Indian Stock market, FII"},"content":{"rendered":"

The P-NOTE<\/strong> policy:<\/p>\n

    \n
  1. FIIs would have to unwind offshore derivative instruments within 18 months.<\/li>\n
  2. FIIs and sub accounts cannot issue P-Notes with underlying as derivatives.<\/li>\n
  3. ODIs linked to stocks should not exceed 40% of assets under custody as of 30\/Sep.<\/li>\n
  4. The regulations came into effect from Oct 25, 2007 close of trade.<\/li>\n<\/ol>\n

    Final Policy What Is That?<\/strong><\/p>\n

      \n
    1. FIIs and their sub-accounts shall not issue\/renew P-Notes with underlying as derivatives with immediate effect.<\/li>\n
    2. 18 months is the period to wound up existing positions.<\/li>\n
    3. Existing P-Notes expiring now\/in future can be renewed, provided the renewal does not go beyond 18 months.<\/li>\n
    4. FIIs\/sub-accounts can invest in derivatives traded on recognized stock exchanges (there are some exchange traded derivatives in Singapore, etc.) but they cannot issue P-Notes based on such derivatives.<\/li>\n
    5. Sub-accounts of FIIs cannot issue fresh offshore derivative instruments with immediate effect. Existing ODI issuing sub-accounts should wind up all the ODIs within 18 months.<\/li>\n
    6. ODIs linked to stocks should not exceed 40% of AUC. Date for reckoning AUC wass 30\/Sep, 2007<\/li>\n
    7. Effective date of these regulations were from close of trade of 25\/Oct\/07.<\/li>\n<\/ol>\n

      The above is in line with what was announced earlier. Still registration \u00a0process has been liberalized. Changes in registration processes are :-<\/p>\n

      1. Broad based criteria:<\/strong> Earlier, SEBI had a condition that no single investor in a fund should hold more than 10% and there should be a minimum of 20 investors. This has now been changed – though the minimum number of 20 investors is required, no single investor should hold more than 49%.<\/p>\n

      2. Track record :<\/strong> It is okay if the fund manager has a track record of 1 year. This essentially allows new funds to register themselves as long as the fund manager has a track record.<\/p>\n

      3. Renewa<\/strong>l of FII registrations would be done once in 3 years as opposed to annually as of now.<\/p>\n

      But one thing that SEBI has done is to bar FIIs from issuing P-Notes to unregulated entities. Which means that P-Notes can only be sold to entities that are ‘regulated’ in their respective jurisdiction, not just ones that are ‘registered’. So, several hedge funds that are unregulated would not be able to participate in the Indian market through the P-Note route. But pension funds, foundations, endowments, university funds and charitable trusts would be recognized as a separate category (even though they are not regulated in their respective jurisdiction) and they would be allowed to register as FIIs.<\/p>\n

      After affects on Indian Stock Market<\/strong><\/em> :-<\/p>\n

      Everything is fine now. We can expect again bull run in Indian stock market. We can witness Sensex touching 20000-21000 mark\u00a0 in very short time. Now the only issue left is weakness of dollar and rupees getting stronger along with Crude price touching sky.<\/p>\n","protected":false},"excerpt":{"rendered":"

      The P-NOTE policy: FIIs would have to unwind offshore derivative instruments within 18 months. FIIs and sub accounts cannot issue P-Notes with underlying as derivatives. ODIs linked to stocks should not exceed 40% of assets under custody as of 30\/Sep. The regulations came into effect from Oct 25, 2007 close of trade. Final Policy What […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[1],"tags":[5609,5608,5610],"class_list":["post-2017","post","type-post","status-publish","format-standard","category-general","tag-effects-of-p-note","tag-p-note","tag-what-is-a-p-note-policy","entry"],"_links":{"self":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/posts\/2017","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/comments?post=2017"}],"version-history":[{"count":0,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/posts\/2017\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/media?parent=2017"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/categories?post=2017"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.niftylivecharts.com\/blog\/wp-json\/wp\/v2\/tags?post=2017"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}