Tuesday, October 23, 2007

PNs in a sense are extra-territorial instruments

Participatory note policy driven by a short-term view of market

The proposed policy changes about PNs (participatory notes) seem to be a reflex action in an attempt to contain the inflow and thereby the Sensex that seems to be gaining momentum of a runaway train, says Mr Vipul R. Jhaveri, Partner-Direct Tax in Deloitte, Haskins & Sells, Mumbai.

The proposal of the market regulator SEBI (Securities and Exchange Board of India), as you would remember, triggered an immediate reaction in the market, causing a big fall in the indices in the opening session, and trading had to be suspended for an hour. The Finance Minister had to quickly make a statement to pacify the market sentiments, and he has since then been, in response to high volatility in the bourses.


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