Mumbai: Market regulator Securities and Exchange Board of India (SEBI) has approved 16 applications of foreign institutional investors and invited overseas investors to register themselves as FIIs.

During a conference call with FIIs ahead of the crucial October 25 board meeting of SEBI to decide on P-notes, SEBI chairman M Damodaran asked sub-accounts (FII agents) to register as FIIs for participating in the Indian capital markets. He said those sub-accounts wanting to convert to FIIs must inform SEBI within 24 hours and apply within a week.

Damodaran, while sticking to the deadline of doing away with derivatives-based P-notes within 18 months, made it clear that the steps to curb issuance of participatory notes were not aimed at curbing capital flows coming through the front door.

There are over 1,100 FIIs currently registered with SEBI. Of these, hardly 33 deal in participatory notes and have set up proprietary sub-accounts to deal with these instruments.

"If you are interested in converting to FIIs, send to us within 24 hours of this conference, a letter of intent indicating that we intend putting in our applications. I would expect that such applications should reach our office within a week," he said.

He said there would be differential treatment between FIIs that chose to do P-note business through sub-accounts and those FIIs who themselves issue such financial certificates.

In all, nine top FIIs, including Goldman Sachs, Merill Lynch and Kotak, attended the interactive video conference on the guidelines which proposes to restrict inflows to PNs to 40 per cent of each of the FIIs asset portfolio.

"We believe, we have adequate responses to take the process (of registering new entities) forward," Damodaran told the conference.