India curtails $88bn p-note business

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The Securities and Exchange Board of India (Sebi) caught out market participants in October by introducing legislation aimed at curbing the issuance of participation notes (p-notes). These synthetic instruments linked to domestic equities had become the major entry point for foreign institutional investors (FIIs) into Indian equities.

At a stroke, the legislation blocked out a large portion of the foreign investment in India's equity markets. Total outstanding p-notes as of August this year stood

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