'Onus on Sebi for hedge fund entry'

On the issue of direct entry by hedge funds into the Indian securities market, Finance Minister P Chidambaram on Wednesday said if the Securities and Exchange Board of India (Sebi) was comfortable with hedge funds, it could formulate eligibility rules for their entry.

"If hedge funds wish to come to India and if Sebi is comfortable in allowing them, then I'm sure Sebi will put in place appropriate regulations under which the they can operate in the country."

This is the first time that the finance minister is going on record on the much-debated issue of hedge funds entry into the Indian markets

Currently, hedge funds are barred from operating directly in the markets, but have an exposure to the equities through the participatory notes (PNs), an offshore derivative instruments distributed by the foreign institutional investors (FIIs) to overseas investors.