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Week
ended July 15: FIIs net purchases in equities at Rs.15.914bn
Mumbai: Foreign Institutional Investors (FIIs)
recorded net purchases in equities at Rs15.914bn (USD
365.6 million) for the trading week ended July 15, while
mutual funds (MFs) were net sellers at Rs3.35bn.
The
foreign funds were net sellers in the debt market at Rs460.5mn
(USD10.7 million) for the period under review, according
to the data available with the Securities
and Exchange Board of India (SEBI) here.
The
mutual funds were net purchasers in the debt market at
Rs4.419 bn.
The
Stock Exchange, Mumbai, (BSE) during the week under review,
saw the sensex gaining 59.46 points to close at 7271.54
points.
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Sebi:
FIIs must tell PN holders to be ready to disclose identity
Mumbai: The Securities and Exchange Board of India
(Sebi) has told foreign institutional investors (FIIs)
that their clients must be informed that information on
their participatory note (PN) investments would be made
available to the market regulator as and when it sought
details from them.
PNs are derivative instruments whose underlying securities
are Indian stocks and are issued by FIIs to overseas investors
who want to invest in Indian stocks but are not allowed
to do so. According to Sebi sources the regulator has
already zeroed in on 4-5 FIIs that are aggressive PN investors.
In fact, 101 new FIIs registered themselves with Sebi
in 2005, taking the total number of FIIs to 738. FII investments
have grown rapidly, with as much as $5.44 billion pumped
into India so far this calendar year.
The officials said the regulator would also seek information
from FIIs at random about their issuance of PNs. Also,
it has made clear to the major FIIs that they needed to
be ready with information on PNs since the regulator could
anytime seek information on sources of funds.
In an earlier interview, Sebi chairman M Damodaran had
told FE, "the jury is still out" on the benefits
or otherwise of excessive FII flows. "The basic idea
also is to see whether Indian money itself is coming back
through the PN route. The sources of such funds continue
to be an issue," a Sebi official said.
PNs and offshore derivative instruments (ODIs) are essentially
routes through which overseas investors can invest through
FIIs in the Indian markets, but also have the benefit
of remaining anonymous. The controversial PN route again
came into sharp focus recently, when Sebi passed an order
on UBS Securities for allegedly being one of the entities
that caused the massive 565-point crash in the Sensex
on May 17, 2004. UBS has challenged the Sebi order at
the Securities Appellate Tribunal (SAT) and the case is
to come up on Monday.
Interestingly, Section 20 of Sebi's FII rules clearly
says every FII shall, as and when required by the market
regulator or RBI, submit as the case may be, any information,
record or documents in relation to its activities as a
FII as may be required by the regulators.
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