SIT to crack down on P-notes, asks Sebi to provide data: Report

Moneycontrol BureauIn its crusade against black money, the government appointed special investigation team (SIT) recently asked the Securities and Exchange Board of India (Sebi) to provide details of those who are investing in India through participatory notes (P-notes), according to a Business Standard report.

Back in June, market regulator Sebi had issued more strict know your customer (KYC) norms and disclosure requirements for P-notes.

The investigative committee wants to ensure that these regulatory changes made by Sebi are enough to control the misuse of this too, they are concerned that via P-note route, Indian companies could still try to bring back unaccounted money.

SIT has asked Sebi to provide details on investments through P-notes and including complete transfer trails and beneficiary owners, the BS report states.

It also plans to examine the link between the individuals named in the Panama Papers leak and p-note holders.

In its most recent endeavour to battle the black money menace, the Centre managed to procure around Rs 65,000 crore under the Income Declaration Scheme (IDS), the biggest ever disclosure of unaccounted money made by 64,275 declarants.

Participatory notes, more commonly known as P-notes, are financial instruments used by investors not registered with Sebi to invest in Indian securities.

It provides foreign institutional investors (FIIs) a quick and easy entry to invest in the Indian capital market but they have been criticised for the relative anonymity they offer to the end investor.