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Friday, 20 May 2016

SEBI Imposed Rule on P-Notes

On Thursday, SEBI made some strict rules for the investors investing in P-Notes. SEBI has made it compulsory to follow the rules of Anti Money Laundering. Now the investors investing in P-Notes have to give KYC. With this decision a stress will be seen on the short term market. However according to the experts this will be beneficial for the long term market.

A general question arrives in our mind is that actually What P-Notes are? To avoid that state here is the answer for the same. P-Notes means Participatory Notes which are the financial instrument for the foreign investors or Hedge Funds to invest in Indian securities. Dividend and the Capital Gain is given to underlying P-notes investor. Before, the person investing in p-notes was unknown for others, but from now he has to register himself in SEBI for further investing.

The outcome of this rule will be negative for the short term basis but will bring a positive impact for long term market. Negative impact can be the extrude of investors from p-notes investing. However this rule will bring into notice about blackmoney, money coming from underworld and fraud peoples. In India this is the first time strict rules made for the foreign investors. With the source of p-notes 2.23 lakh crore rupees were invested in the Capital Market in March this year.