Morgan Stanley, Merrill among top 5 PN issuers

Top five participatory note (PN) issuing foreign institutional investors including Morgan Stanley and Merrill Lynch Espana account for 59.59% of the notional value of the outstanding PNs at the end of July this year.

This information was given by minister of state in the finance ministry Pawan Kumar Bansal in the Lok Sabha today. There are total 28 FIIs issuing PNs in India, he added.

Morgan Stanley & Co International has issued PNs worth Rs 55,401 crore, followed by Merrill Lynch Espana (Rs 47,928 crore), Citigroup Global Markets (Rs 45,018 crore), Goldman Sachs and Co (Rs 34,771 crore) and CLSA Merchant Bankers (Rs 24,388 crore).

PN is a derivative instrument issued in foreign jurisdictions by an FII or one of its associate entities. The instruments generally have Indian securities or indices as the underlying asset in the form of equity, debt, derivative or an index.

Investors in PNs merely derive economic benefits of investing in the security, without actually owning the underlying Indian securities, which are being held in the name of the FII that issued the PN.

Meanwhile, answering another question, Minister of State in the Ministry of Finance Pawan Kumar Bansal said about 18.86 lakh demat accounts have been released by the depositories since January 1, 2007 after submission of PAN number by account holders.

The value of holdings in frozen demat accounts with the depositories stood at Rs 95,769 crore as on August 31, 2007.