No bar on FIIs issuing PNs: SEBI chief

The Securities and Exchange Board of India (SEBI) on Wednesday ruled out the prospect of imposing any ban on foreign institutional investors (FIIs) issuing `Participatory Notes'. Participatory Notes (PNs) are one of the modes which are suspected to have been misused by share speculators in bringing down the stock market on May 17 last year. "We are not planning to ban PNs," the SEBI Chairman, M. Damodaran, told newspersons on the sidelines of the CII annual session here while dismissing speculation that a spate of conviction orders were in the pipeline against FIIs for misutilising the PN route to bring down the market. Mr Damodaran, however, confirmed that SEBI was in the process of probing 11 more entities for their likely involvement in the `Black Monday' market crash within a few days of the United Progressive Alliance (UPA) regime coming to power at the Centre. Having issued show-cause notices to 12 entities, SEBI has thus far pinned only one — UBS Securities Asia — for not complying with its rules on furnishing details of PNs (offshore derivatives with underlying Indian equity) issued to other investors. "There are 12 parties which were issued notices... The proceedings are at various stages. Orders will be passed," Mr. Damodaran said while refusing to comment further as to whether more FIIs were involved in orchestrating the market crash. On the Reliance imbroglio in which the two Ambani brothers are locked in a bitter battle over ownership issues, Mr. Damodaran said the board would take appropriate action on complaints filed by the RIL Vice-Chairman and Managing Director, Anil Ambani. "We have received certain letters from the company's Vice-Chairman and Managing Director (Anil Ambani). We are acting on those letters," he said.