FIIs can rollover PNs up to 18 months

In a bid to calm the investors, market regulator Securities and Exchange Board of India (Sebi) today said Foreign Institutional Investors would be allowed rollover Participatory Notes in derivatives market, provided it does not exceed the 18-month limit.
“It is made clear that there is no proposal to bar an Overseas Derivative Instrument (ODI) contract expiring this month or in the following months, being renewed provided the renewal does not go beyond 18 months,” Sebi said in a clarification to its draft discussion paper on ODI that includes Participatory Notes (PNs).
The Sebi clarification clears the air of uncertainty over the fate of renewal of PNs that are due to expire this month or will expire in the coming months.
SEBI had yesterday invited public comments on its proposal to restrict with immediate effect, issuance of PNs in derivative markets by FIIs and their agents.
As per the proposals, FIIs and their sub-accounts are required to wind up the current ODI position over 18 months, during which Sebi will review the position from time to time.
Sebi has sought comments from public by 20 October on its discussion paper, which Finance Minister P Chidambaram today said will become regulations “with or without some modifications.”
Sebi’s clarification came after the Sensex crashed by over 1,700 points within minutes of commence of trading, leading to closure of the markets for an hour. The markets, however, have recovered considerably after an assurance by the Finance Minister that there is no proposal to completely ban Participatory Notes.

What's next now

We expect

SEBI to issue clarification

Chidambaram to come and smile ;-), and be stubborn

If Chidu is stubborn and SEBI comes up with a lame clarification, one more circuit down at 15%

Market to open at 10.55 AM

Asian markets fall looking at India Circuit Down

Uday Kotak - Good for long term

Uday Kotak says

Short Term pain

Long term Gain

Wants all FIIs to register rather than invest through PNotes

Our notes

Terrorists investing in the stock market ?

SEBI clampdown because of this ?

Dubai based institutions linked to terrorist groups investing ?

Kotak seems to make sense

Once more, Don't PANIC!