No concrete evidence of terror funds in markets, says Chidambaram

Finance minister P Chidambaram while talking about P-Notes and FII registrations said a recent case of terror-linked investments had been detected. "Recently one case has come to our notice. It is suspected, let me repeat, it is suspected that this case may have some links with some persons who are under watch. This case is being investigated, but I am not in a position to give any details of that case at this juncture."

According to CNBC-TV18, Chidambaram clarified that there was no concrete evidence of terror funds in the stock markets.

On P-Notes, he announced that FIIs and their sub accounts shall not issue or renew ODIs with underlying derivatives and they require winding up their positions over 18-months. He said, "Issuance of ODIs by sub accounts will be discontinued and they will wind their current position over 18 months. FIIs, who currently issue ODIs with notional value P-Notes outstandings, excluding derivatives, where it is less than 40per cent, you can only issue it incremental rate of 5per cent."

The FM said that if it is already more than 40per cent, one cannot issue any P-Notes unless it is against cancellation redemption. So there is no absolute ban on P-Notes. One kind of P-Notes, which are based on derivatives are being regulated, capped and they are being requested to wind down that over a period of 18-months.             

The FM also said that the number of FIIs, which stand registered as on 15 November 2007, 1,157 FIIs were registered with SEBI. Now up to 29 November 2007, the investment of FIIs in equity is $65.18 billion and their investment in debt instruments is $2.7 billion.