India's capital market regulator is set to ease some restrictions on foreign portfolio investment to help revive capital inflows, two newspapers reported on Monday.
Citing unidentified sources, the Hindu Business Line said the Securities and Exchange Board of India (SEBI) may lift a ban on fresh issue of participatory notes, or P-notes, to ease tight liquidity conditions.
P-notes are issued by foreign funds registered in India to unregistered overseas investors. In October last year, the regulator put curbs on them to help the government keep track of foreign flows into the country. [ID:nBOM282673]
The Economic Times said SEBI's board would meet on Monday and consider giving flexibility to foreign funds, which were barred from owning more than 40 percent of their assets in P-notes and asked to unwind certain holdings within 18 months.
Citing persons familiar with matter, the newspaper said one option could be to extend the deadline, that expires by March 2009, to unwind the positions.
A SEBI spokesman could not be immediately reached for comment.
Foreign funds have pulled out nearly $9.4 billion from Indian shares so far in 2008, largely due to the global credit turmoil, pushing the main share index down more than 38 percent to an 18-month closing low of 12,526.32 points on Friday.
In comparison, the overseas portfolio investors had ploughed in a record $17.4 billion in 2007.
Citing unidentified sources, the Hindu Business Line said the Securities and Exchange Board of India (SEBI) may lift a ban on fresh issue of participatory notes, or P-notes, to ease tight liquidity conditions.
P-notes are issued by foreign funds registered in India to unregistered overseas investors. In October last year, the regulator put curbs on them to help the government keep track of foreign flows into the country. [ID:nBOM282673]
The Economic Times said SEBI's board would meet on Monday and consider giving flexibility to foreign funds, which were barred from owning more than 40 percent of their assets in P-notes and asked to unwind certain holdings within 18 months.
Citing persons familiar with matter, the newspaper said one option could be to extend the deadline, that expires by March 2009, to unwind the positions.
A SEBI spokesman could not be immediately reached for comment.
Foreign funds have pulled out nearly $9.4 billion from Indian shares so far in 2008, largely due to the global credit turmoil, pushing the main share index down more than 38 percent to an 18-month closing low of 12,526.32 points on Friday.
In comparison, the overseas portfolio investors had ploughed in a record $17.4 billion in 2007.
Source: http://in.reuters.com/article/fundsNews/idINBOM33079620081006
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