Sebi restricts use of P-notes further

Sebi has put in place restrictions on foreign portfolio investors from issuing participatory notes where the underlying asset is a derivative, as the markets regulator continues to make norms stricter for such instruments. Now, participatory notes or Offshore Derivative Instruments (ODIs) where the derivative is underlying can be issued only for the purpose of hedging with respect to the equity shares held. Besides, the watchdog has said that existing positions on unhedged P-Note derivatives have to be liquidated by the end of December 2020.