Sebi might ease stand against p-notes in derivatives market

The regulator may not stick to pure definition of hedging; may allow cross-sectoral hedging

The Securities and Exchange Board of India (Sebi) is likely to take a less stringent approach in banning participatory notes (p-notes) from the derivatives market.
 
According to sources, the regulator may not stick to the pure definition of hedging and allow cross-sectoral bets.
 
Last month, Sebi had proposed to ban p-notes from taking naked positions in the derivatives segment. This means a p-note investor will be allowed to deal in the derivatives counter of a stock, say Reliance Industries, only if the investor owns the underlying stock in the cash segment.

The proposal faced