The Securities and Exchange Board of India has ruled out any measures to clamp down on the participatory note route taken by foreign institutional investors in the country.

According to finance ministry sources, the board of the capital market regulator, which met in New Delhi on Monday, did not find any cause for concern on the issue of FIIs investing through the participatory note route.

Sebi's own estimate is that less than 20 per cent of the FII funds into India have come through the participatory note route.

The sources further said the high-level capital market committee, headed by Reserve Bank of India Governor Y V Reddy, had asked its technical committee to look into the issue and recommend necessary measures.

The board of the market regulator also considered the recommendations of the finance ministry to rework several provisions of clause 49 of the Listing Agreement with those under the Companies (Amendment) Bill.

Even though the introduction of the former has been deferred at present, the difference in interpretation of several issues was discussed in the ministry recently to ensure that none of the provisions went against the Companies (Amendment) bill.

The contentious issues included the norms for appointment as independent directors in the board of companies, as well as their powers to review legal compliance reports.

Sebi had revised clause 49 of the Listing Agreement in August this year.

Any company seeking to list on a stock exchange for the first time and other companies with a paid up share capital of Rs 25 crore (Rs 250 million) or more had to comply with these norms.

But because of the differences with the Companies (Amendment) bill there has been a question mark on their introduction.