HSBC likely to pull out of P-note biz owing to tightened rules

Moneycontrol BureauParticipatory notes or P-notes could no longer be part of HSBC’s operations, reports Business Standard. The bank has decided to wind up its P-note operations owing to the tightened regulatory environment that has made the business unattractive.

The bank, with a market share of about 6 percent in the overall market for offshore derivate instruments at the end of last fiscal year, is a top issuer of P-notes.

P-notes are instruments issued by registered foreign institutional investors to overseas investors, who wish to invest in the Indian stock markets without registering themselves.

A committee set up by the bank to discuss the business model of P-notes has come back with suggestions that income from P-note operations is likely to go down in the next five years.