WEST PALM BEACH, FL (HEDGECO.NET) – The Securities and Exchange Board if India [SEBI] has clarified its former decision with respect to Hedge funds trading in Participatory Notes. The Indianregulator now says that all international hedge funds can now trade in P-Notes in India, such hedge funds must however be registered by a regulator such as the Registrar of Companies of India, the USSecurities and Exchange Commission, or the Financial Services Authority of United kingdom. SEBI also said members of exchanges such as the New York Stock Exchange [NYSE] or the London Stock Exchange[LSE] can also hold P-Notes according to the released statements.
SEBI also clarified other ambiguities in its previous statements about the companies to whom such instruments could be issued. P-Notes could be issued to any company or entity whose parent company is registered with such industry regulators as SEC, or FSA (According to SEBI).
In addition, to these defined entities, SEBI also clarified that other individuals, organizations or companies whose investment advisory obligations are being regulated by agencies such as the ones mentioned above can also hold P-notes in India. SEBI described some of such groups in its statement, when it said; “any individual or entity (such as funds, trusts, collective investment schemes, investment firms or limited partnerships) whose investment advisory function is managed by any entity”, could also hold P-notes as well.
Brokerage houses in the United States or United Kingdom who also manage hedge funds are also granted full privileges to trade P-notes in India, on condition they are also being regulated by such agencies defined above. SEBI would however require that the actual identities of �beneficial owner� be disclosed, SEBI�s �Know your client� code requires institutions such as brokerage houses and the like to fully identify owners of such accounts.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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