Relief unlikely for PN holders
An HT survey of leading securities firms shows there will be no relaxation in SEBI's decision to phase out PNs, reports BS Srinivasalu Reddy.business Updated: Oct 24, 2007 21:19 IST
The stock market could suffer a double whammy on Thursday with the board of market regulator Securities and Exchange Board of India (Sebi) unlikely to relax the broad text of its proposals on Participatory Notes (PNs) and October futures expiry coinciding with it.
Most of the chief executive officers of the 12 leading securities firms surveyed by
felt that there would absolutely be no relaxation in the regulator's main proposals on phasing out of PNs. This could effectively lead to volatility in the markets for 20 days to four months, they said, adding that the longer-term outlook, however, remains positive by all means.
Only six of the 12 firms surveyed expect some easing in the timeframe for adhering to the proposed norms. Relaxations are expected in the 40 per cent limit temporarily and the timeframe given for sub-account holders to register themselves as FIIs (foreign institutional investors).
In a report released on October 16, Sebi had proposed a ban on new issue of PNs by FIIs with immediate effect and unwinding the current exposures in equities in 18 months. The regulator's board is scheduled to discuss the proposals for approval at its meeting on Thursday.
And the confusion over the possible decision of the Sebi is likely to lead to huge volatility in the market on Thursday. Besides, the low rollover of October futures till Wednesday also indicates wild gyrations.
First Published: Oct 24, 2007 21:14 IST