Markets could get the respite they want. Capital market regulator Securities and Exchange Board of India (Sebi) is expected to clear the doubts hanging over participatory notes by making the registration process for foreign institutional investors swifter and hassle-free. For this, Sebi may upload a road map on its website on Monday.
A senior Sebi official said the regulator was also expected to clear pending applications of at least 40 to 50 FIIs in one tranche some time this week. This was aimed at telling the market that the regulator should not be faulted for FII registration delays and was, in fact, encouraging certain funds to register instead of taking the participatory notes route, Sebi sources explained.
Sebi is expected to specify on its website steps it has taken until now on the matter and the moves FIIs or their custodians need to make. This would be along the lines of detailed information being put up on the Sebi website on developments in the corporate bond market, sources said.
Already, the website has a frequently asked questions (FAQ) section, which has 11 pages dedicated to FIIs and their sub-accounts. The section offers a detailed overview to FIIs with respect to the pre-registration and post-registration process.
There has been hue and cry over sudden FII inflows, exceeding $8 billion, over the last two months into the Indian equities and derivatives market. Most of the inflows into the Indian capital market used the PN route. The argument put forward was that, since these foreign investors did not wish to miss the bus by opting for a lengthy registration process, FIIs took the PN route through which they could have got become active players in the Indian markets quickly.
The delay on the part of Sebi to clear FIIs is also because of the process of getting clearance from the Committee of Executive Directors (COED). The COED meets at the regular intervals, but some key officials concerned with the clearance of the process might not be present and, therefore, clearance gets delayed. There is also a proposal to do away with the COED clearance.