P-notes. A necessary evil?

P-notes (pn) or participatory notes, as seen in stock markets are much discussed recently.Though i am a novice in this area, i took my time to research through this and try to decide if they are necessary for our economic growth or the issue is just being exaggerated!
What really piqued my interest was that p-notes would indeed guarantee investors from revealing their identity! Well , that would definitely lead to few discrepancies in the stock ( thats what i initially thought).Well to understand this entirely, we should first know what P-notes are P-notes are used by foreign institutional investors to invest in Indian stock markets without registering themselves with the Securities and Exchange board (sebi) of India.
These are used by hedge funds (which invest through P-notes ) that are not registered by the Sebi to invest in India.Here Indian brokers can buy the stocks and issue P-notes to the foreign investors. The gains acquired go back to the investors.These are issued to the real investors through the FII (foreign institutional investor. But the point is, you have no ways to know who owns them. This may lead to fluctuations in the stock markets leading to a mayhem, which is the case now. The hedge funds are not directly registered to the Sebi and can be operated through sub accounts in FII, which leaves us no trace of the real investor. This can prove disastrous to the economy, because this will lead to sudden fluctuations and even worse can lead to stocks being manipulated by foreign agencies ( whom we cant even trace!).
Almost 30% of foreign investments come through the hedge funds, so a ban on the p-notes has been proposed, which may not be favored by the foreign investors but should be implemented to control the stock exchange and proper use of the FII.
Why were they introduced then? Well, the limited access to the FII , prompted the introduction of the P-notes, which is a much simpler way to invest in Indian markets.Though they initially had positive impact on the indian stock market, at this stage, they should be banned because of its influence over the stock market and its nature of being manipulative and controlling the stock market if intended.
Maybe they P-notes have few advantages that would help our Indian stock market, but given the circumstances, they are best removed. I hope this issue is prioritized looking into its advantages and disadvantages for the Indian stock market, and the right decision is taken!
I hope this post was useful in many ways and i am happy to have discussed this issue, which i believe should be understood by all of us and discussed over. Any comments or issues regarding this are most welcome. :) I would love to know your opinion!