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FII Net: -79.59
DII Net: 149.20
21 May 2012
FII & DII trading activity on BSE and NSE on Capital Market
--- All figures in crores --- Provisional data---
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Even an blind man can tell that black money was coming through PNs....
Will emerging markets outperform developed markets in 2012?...
I think P Notes are the symptoms of a disease and not disease itself. The focus of Government should be to eradicate the ease with which black money gets generated. There will always be countries that would want to be "Tax Heavens" but how come people are able to route out hundreds of billions of DOLLARS shows that the internal controls in India is a joke. ...
Is currency stability something that countries can forgo upon?...
Is currency stability something that countries can forgo upon?...
Atleast Indians are round tripping money for investment in indian, if pns are banned that money will go towards buying mansions and yatch overseas. ...
If pns are banned rupee will hit Citi`s target 60 ...
The White Paper on black money prepared by the finance ministry, explaining how participatory notes (PNs) are used as a conduit for round tripping/money laundering. That begs the question: if the finance ministry is aware that PNs are mostly (mis)used for dubious activities, why has it not made attempts to phase out this instrument. PNs have been in existence for more than a decade, and surely some deadline could have been set. Sebi’s original plan was to phase out PNs by March 2009, but that was never adhered to. In October 2007, the regulator had all but abolished the instrument by banning foreign brokerages from issuing fresh PNs. But the ban was revoked in October the following year, partly to “encourage” FII inflows into the Indian stock market, which was then reeling under the impact of the global financial crisis, like most other markets. Proponents of PNs argue that India is heavily reliant on foreign capital and banning PNs would hurt inflows. But the: is this the kind of foreign capital that India wants to attract.
What do you think? Should the government ban PNs altogether?
Extract from the White Paper:
Investment in the Indian Stock Market through participatory notes (PNs) is another way in which the black money generated by Indians is re-invested in India. PNs or overseas derivative instruments (ODIs) are issued by FIIs against underlying Indian securities, which can be equity, debt, derivatives, or even indices. Thus, through the instrument of PNs, investment can be made in the Indian securities market by those investors who do not wish to be regulated by Indian regulators due to a variety of reasons such as not meeting the eligibility criteria for investment in Indian securities market, cost and time considerations, or the desire to keep their identity anonymous, which is possible also for the reason that PNs/ODIs can be freely traded and easily transferred without disclosing the identity of the actual beneficiaries. The PNs can only be issued to persons who are regulated by an appropriate foreign regulatory authority and after satisfying know your customer (KYC) norms. Further, the FIIs are required to report to SEBI on a monthly basis, the name and location of the person to whom the PNs/ODIs have been issued. However, in view of the fact that the jurisdictions in which the persons to whom PNs are issued are not only countries such as the UK or USA but also well-known OFCs such as the Cayman Islands, British Virgin Islands, Switzerland, and Luxembourg, it is possible to hide the identity of the ultimate beneficiaries through multiple layers which is also evident by going through the orders passed by SEBI in some cases. The ultimate beneficiaries/investors through the PN Route can be Indians and the source of their investment may be black money generated by them.
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