Sebi issued a detailed framework with regard to tightened KYC and disclosure requirements for Offshore Derivative Instruments (ODIs).
Sebi today said foreign portfolio investors can issue fresh Participatory Notes (P-Notes) to those entities which comply with tightened regulations by capital markets watchdog.
Sebi, earlier this month, issued a detailed framework with regard to tightened KYC and disclosure requirements for Offshore Derivative Instruments (ODIs) – commonly known as P-Notes, which provide the foreign investors an easier and cost-effective route to invest in Indian markets without directly registering as Foreign Portfolio Investors (FPIs).
Under the new norms, all users of ODIs would have to follow Indian KYC and AML (Anti Money Laundering) Regulations, irrespective of their jurisdictions, while the ODI issuers will be required to file suspicious transaction reports, if any, with the Indian Financial Intelligence Unit, in relation to the ODIs issued by them.
These norms are aimed at checking any misuse of PNotes.
Fresh ODIs can be issued to those entities which comply with Sebi regulations, including tightened norms, along with other conditions that may be notified by the markets watchdog from time to time, Securities and Exchange Board of India (Sebi) said in a circular issued today.
The ODI subscribers who have subscribed to ODIs can continue to do so provided they comply with Sebi norms including the new tightened framework.
Those ODI subscribers which do not meet the norms “including unregulated funds whose investment manager is appropriately regulated, can continue to hold the position till the date of expiry of such positions or till December 31, 2020, whichever is earlier. Such subscribers cannot take fresh positions or renew the old positions.”
The circular will be effective from August 1, 2016.