SEBI warns FIIs again on overseas lending and borrowing

Capital market regulator SEBI has reportedly reaffirmed its disapproval of overseas lending and borrowing by foreign institutional investors (FIIs), who are eligible to issue participatory notes (PN).SEBI has told the PN issuing FIIs not to take any fresh lending and borrowing positions in the overseas markets, as it adversely affects markets in India. SEBI apparently met top PN issuing FIIs earlier today to discuss the issue of overseas lending and borrowing. It may be recalled that on Monday, the market watchdog had said that it was not pleased with FIIs allowing its foreign funds to borrow Indian shares issued under PNs and take short positions.SEBI had also said that the overseas lending and borrowing activity of FIIs was being monitored, and if necessary it would take stronger measures, as considered appropriate, to stop such transactions. On Oct. 15, SEBI had directed PN issuing FIIs and their sub-accounts to give details of the lending and borrowing activities abroad. The regulator had asked them to release the data twice a week, on Tuesday and Friday. The first such data was released by SEBI on Oct. 17 and the second set of data was released on Oct. 21.SEBI seeks to curb 'illegal' short selling by FIIs.SEBI disapproves overseas lending and borrowing by FIIs.