Slide 1: 33 FIIs provide information to SEBI about PNs issued overseas
Mumbai, Oct 21, 2008 (Asia Pulse Data Source via COMTEX) -A day after SEBI disapproved lending of stocks by FIIs to overseas entities, the market regulator today released information given by 33 FIIs about participatory notes issued to these entities on October 15, 16 and 17, which has the effect of short sale. According to the information provided by FIIs, PNs issued to overseas entities had the largest number of NTPC shares as underlying securities. PNs were issued for 21,19,750 NTPC shares and 15,75,000 Hindustan Unilever shares, as per the information. PNs were also issued for Wipro, ICICI Bank, Reliance Communications, Reliance Industries and Reliance Petroleum, Hero Honda, BHEL and Infosys. Analyst Jagannadham Thunuguntla, equity head Nexgen Capital, said the three-day figures might have some impact on the cash segment, but they are not unusually high numbers. Yesterday, the market regulator disapproves stock lending and borrowing activity of FIIs to overseas entities, which could be used like short selling, and warned of stronger action against such practice, if needed. Earlier, 17 FIIs had provided similar information to SEBI for October 10, 13 and 14. Short selling implies to selling of securities that are not owned by the seller. While many markets overseas have banned short sale, India has refrained from exercising this option as the mechanism here is quite regulated. Unlike in many other countries, short sale of naked variety, which are not covered by borrowing of shares, is not allowed in India.
