Mumbai: The Securities and Exchange Board of India or Sebi on Wednesday clarified that existing subscribers to offshore derivative instruments (ODIs) can continue to hold their positions even if they are not compliant with Sebi’s norms or are unregulated funds till the date of expiry of such positions or till 31 December 2020, whichever is earlier.

ODIs typically include participatory notes (P-notes). Sebi clarified that the unregulated funds and non-compliant subscribers cannot take fresh positions or renew the old positions after the expiry of their contracts or beyond 2020, unless they comply with the Sebi norms.

During the FII (foreign institutional investor) regime till 2014, ODIs were issued to unregulated funds under the FII norms. However, later Sebi tightened the norms in 2014, clubbed all classes of foreign investors into one category as foreign portfolio investors (FPIs) and made it mandatory for P-note issuers to have only those subscribers which are either well-regulated or where the identity of the end-beneficiary is known.

The clarifications will be effective from 1 August 2016, Sebi said.