Akin to the government's clamp down on black money, SEBI, the capital market regulator has also taken a slew of stern measures to avoid instances of channelizing black money through P-notes or Participatory notes.

Participatory notes are issued by the registered FPIs to offshore investors who want to take position in the Indian markets-equity, debt and derivatives without direct registration. Much of the norms per se P-notes have seen an overhaul given the controversy the investment instrument reels in.

For the month ended September, investments via P-notes drifted to an eight-year low of Rs. 1.23 lakh crore. Earlier the low investment in P-notes was recorded way back in August 2009 with cumulative value of Rs 1,10,355 crore. Nonetheless, the quantum of FPI via P-notes remains flat @ 4.1%.

To check any misuse earlier this year, SEBI has imposed a fixed fee of $1000 for each of the instrument. At the same time, it barred FPIs from issuing these participatory notes in cases where the underlying happens to be derivatives. In a similar stance to curb black money routing through offshore markets, SEBI also barred investments via P-notes for resident Indians, NRIs as well as entities owned by the capital market regulator in April as a major step towards rationalizing the law in relation to investments via P-notes.

With Inputs From PTI