Mumbai, Oct. 22: Foreign institutional investors (FIIs) were disappointed that Sebi chairman M. Damodaran was inflexible on the 18-month time limit for the winding down of P-notes issued by sub-accounts.

They felt he had also failed to clarify a lot of other issues, including the basis for calculating their assets under custody that will enable them to determine how much of P-notes they can issue.

Under the proposed rules, Sebi has set a 40 per cent thumbrule. This means that the level of P-notes should be limited to 40 per cent of their assets under custody.

One FII source said no real positives came out of the meeting.

However, another official said the one-week time that the regulator had given for proprietary sub-accounts to register as full-fledged FIIs was an attractive proposition.

The video conference came on a day when stock markets staged a turnaround amid weak global cues and dull activity from FIIs.

Brokers say the P-note issue has been factored in by the markets and that there is a fair chance that there could be a pull-back rally on Tuesday. “The markets could swing to other factors like global cues and performance of corporate India. The P-note scare is behind us,” an analyst said.

The BSE sensex moved between 17704.83 and 17171.45 before ending the day at 17613.99, a net rise of 54.01 points or 0.31 per cent over Friday’s close of 17559.98. FIIs were net sellers to the tune of $797 million on Friday.

They however, bought some shares on the preceding day.