P-note proposals: Experts expect long-term gains

MUMBAI: The final verdict on the P-note proposals is in and the highly anticipated Sebi board meeting on Thursday held no big surprises for investors. The market regulator stuck to its draft guidelines, which had triggered a major meltdown on the bourses last week when they were first issued. Market players and investors were anxious to see if the regulator would introduce any new clauses or change the existing proposals on Thursday.
But Sebi chief M Damodaran only offered clarifications on the draft proposals, which went through with no major changes.
Market players had mixed opinions on how the new norms would affect trading in the short-term, although they agree that this is positive for the long-term.
"There was nothing new that came out of the Sebi board meeting. Overall, it will be negative for the markets in the short-term and the bourses will see some pain in the next few trading sessions. But this is a good move in the long-run, and will ensure quality investors coming into the markets," said Ambareesh Baliga, V-P, Karvy Stock Broking.
"The market regulator is looking for greater transparency, and needs to know where the money is coming from. There is also greater clarity on the proposals, with the Sebi stating that the fund manager of an entity would be required to have a track record of one year and not the fund, which is very positive," he added.