Markets regulator SEBI (Securities and Exchange Board of India) has put in place a stricter KYC (Know Your Customer) norms and disclosure regime for Participatory Notes (P-Notes). The aim is to make it tougher to use these offshore instruments without disclosing the money-trail and details of their users. The measure comes after taking into account suggestions from SIT on black money to ensure this route is not used for money laundering.
Under the new norms, all the users of P-Notes would have to follow Indian KYC and Anti Money Laundering Regulations, irrespective of their jurisdictions. The P-Note issuers will be required to file suspicious transaction reports with the Indian Financial Intelligence Unit. P-Notes are offshore/overseas derivative instruments (ODIs) issued by registered foreign institutional investors (FII) to overseas investors. They provide easier and cost-effective route to foreign investors to invest in Indian markets without directly registering as Foreign Portfolio Investors (FPIs).
So let’s discuss some questions related to this post :
1. Name the organization which has issued stricter KYC norms, and also disclose norms for P-notes?
2. Expand the terms SEBI, KYC, P-Notes, ODIs, FII and FPIs.
Courtesy: Economic Times