PNs can invest in India, but as FIIs: P Chidambaram

17 October 2007

On SEBI''s move
What was announced by SEBI yesterday is parts of the series of steps that it have been taken to moderate the capital inflows into India. I was surprised to see one-two alarmist statements on the television yesterday and this morning. These statements are unfortunate; there is no place or need for any alarmist statements.

Investors through participatory notes are certainly welcome to invest in India; but for the present, it is important to moderate these capital flows. And therefore, SEBI has proposed a number of measures that will moderate these capital flows. If an investor, through the participatory note, wishes to register in India as an FII, he/she is most welcome to invest.

In fact the system itself is triggering mechanism and the systems that have been put in place by SEBI in the capital market have worked. And they will continue to work throughout the day and there is no reason for any alarm at all.

In fact, I would urge some of you to go back and do your homework, find out who is buying on the NSE and BSE - you will find that many leading FIIs are actually buying at the moment at the NSE and BSE; I don''t want to take names.

Therefore, let me assure all investors that what has been done is a step to moderate capital flows, which have become very copious and very abundant. This is the culmination of a long discussion among the RBI, the SEBI and the government.

The decisions that have been announced by SEBI are good decisions; good in the long-term interest of the investors, good for the capital market in India and all this will quieten down before the day''s out.