"It is made clear that there is no proposal to bar an Overseas Derivative Instrument (ODI) contract expiring this month or in the following months, being renewed provided the renewal does not go beyond 18 months," SEBI said in a clarification to its draft discussion paper on ODI that includes Participatory Notes (PNs).

The SEBI clarification clears the air of uncertainty over the fate of renewal of PNs that are due to expire this month or will expire in the coming months.

SEBI had on Tuesday invited public comments on its proposal to restrict with immediate effect, issuance of PNs in derivative markets by FIIs and their agents.

As per the proposals, FIIs and their sub-accounts are required to wind up the current ODI position over 18 months, during which SEBI will review the position from time to time.

SEBI has sought comments from public by October 20 on its discussion paper, which Finance Minister P Chidambaram today said will become regulations "with or without some modifications."

SEBI's clarification came after the Sensex crashed by over 1,700 points within minutes of commence of trading, leading to closure of the markets for an hour. The markets, however, have recovered considerably after an assurance by the Finance Minister that there is no proposal to completely ban Participatory Notes.