SEBI tightens P-Note norms to check money laundering

The money market regulator SEBI has tightened its norms for Participatory note (P note) users to follow Indian anti-money laundering law and report any suspicious transactions immediately. Based on the recommendations of the Supreme Court SEBI has appointed a Special Investigation Team on black money and also tightened the due-diligence requirements for issuance and transfer of these instruments and put the onus on the original issuer for compliance to Anti-Money Laundering Regulations.

Apart from it, issuers would have to conduct periodic review and report the complete transfer trail of P-Notes to SEBI on a monthly basis in addition to the present requirement of reporting details of their holdersThe changes have been finalized after discussing with concerned stakeholders including some major issuers of P-Notes and they have broadly agreed to the suggested measures in the interest of the markets.

P-Notes are typically instruments issued by registered foreign institutional investors to overseas investors, who wish to invest in Indian markets without registering themselves directly in India to save on time. But, they still need to go through a proper due diligence process. Disadvantage of P-notes, Any entity investing in P-Notes is not required to register with SEBI. It enables large hedge funds to carry out their operations without revealing their identity.

So let’s discuss some questions related to this post :
1. Name the organization which has tightened the P-notes norms to check money laundering ?
2. Expand the term SEBI ?

Courtesy : Business Standard 


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