Supreme Court issues notice on P-Notes plea

Supreme Court issues notice on P-Notes plea

Supreme Court issues notice on P-Notes plea

The Supreme Court on Friday issued notice to the Centre, RBI, market regulator Sebi  and CBI on a plea to prevent offshore portfolio investors, who have invested in the Indian stock market through P-Notes, from withdrawing the money till further orders.

 A bench of Justices Dipak Misra and C Nagappan sought  responses from different agencies on the interim application by advocate M L Sharma in his pending PIL (public interest litigation) seeking CBI probe against Indian offshore bank account holders named in the Panama papers.

The petitioner contended that Rs 25 lakh crore black money, floating in the stock market, would be siphoned off by the FIIs, who have invested through P-notes.

 P-Notes are derivative instruments issued by registered foreign portfolio investors to overseas investors to enable them trade in stock market here without getting registered with Sebi. Referring to a recent proposal of Sebi which increased disclosure requirements for issuance of P-Notes, the counsel claimed this would lead to siphoning off money by investors.

The new rules enable the regulator to check the complete transfer trail of P-Notes money on a monthly basis, he claimed. The petitioner also sought direction to the CBI to seize entire records of participatory notes under the Sebi and RBI’s control.

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