The ODI issuer such as HSBC Bank Mauritius Ltd has stopped issuing further ODIs and has reported ‘nil’ outstanding values of ODIs as of 31 December 2016. Photo: MintNew Delhi: A number of foreign investors including HSBC and UBS have stopped issuing controversy-ridden Participatory Notes (P-Notes) as regulatory and enforcement agencies step up their clampdown on misuse of this once-popular instrument among foreigners to invest in Indian markets. Sebi has stepped up its scrutiny of investors issuing P- Notes, as also those parking their money in Indian markets through this route, amid a stepped-up clampdown on their misuse for round-tripping illicit funds. “The ODI issuer such as HSBC Bank Mauritius Ltd has stopped issuing further ODIs and has reported ‘nil’ outstanding values of ODIs as of 31 December 2016,” a top official said, while adding that Swiss bank UBS is also said to have stopped issuing ODIs from January. Sebi has seen the compliance cost for ODI issuing FPIs also increase due to consistent tightening of norms by the regulator, while simultaneous liberalisation of FPI norms have made ODI route “less attractive vis-a-vis taking direct registration”.

Source: Mint February 19, 2017 10:30 UTC