WEST PALM BEACH, FL (HEDGECO.NET) – The Indian Ministry of Finance and the Securities and Exchange Board of India (SEBI) are easing registration requirements for foreign hedge funds. This measure isgeared towards allowing foreign hedge funds easier access to the Indian markets according to new reports.
According to the Indian finance minister, Mr. P. Chidambaram, this effort will help to attract foreign hedge funds to register directly with the SEBI, as opposed to the now standing requirement of registration through the Participatory Notes [PNs] investments. Participatory Notes are contract notes issued by the Indian FIIs against underlying securities to overseas investors. According to the report, this process is to enable foreign investors to participate in the Indian markets while avoiding registration hassles with the Indian regulators.
An official with the Indian regulatory body said, “We want hedge funds to come and invest in our capital market directly. Why should the funds come through the PN route?� This change of tactics is expected to attract significant amount of capital to the Indian Capital market. SEBI report showed that during the first few months of 2004, foreign hedge funds had pumped in over US $10 billion into the Indian capital markets.
The new SEBI report also changed some clauses in the previous classification of hedge funds. According to SEBI, �all hedge funds are not necessarily speculative funds.� The agency also said the Indian markets have instituted sufficient checks and balances to keep the markets safe from possible manipulations.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
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