Sebi p-note curbs shut India door on several hedge fund

Experts say rules prevent global hedge funds from taking direct exposure to single stock derivatives

The market regulator Securities and Exchange Board of India's (Sebi's) move to ban participatory note (p-note) subscribers from taking unhedged positions in the derivatives market has virtually shut the door on several global hedge funds.

Tax experts say numerous jurisdictions, including US, Germany and France do not allow their local funds to invest directly in Indian single-stock derivatives. The majority of the p-note participants, who unwounded their derivative positions post the Sebi circular last month are unlikely to come back to the Indian markets.

While nothing stops them from direct registrations, their local rules won't allow them to deal single-stock