The Special Investigation Team, SIT on black money has asked Securities Exchange Board of India, SEBI to identify real owners of foreign funds coming through the Participatory-Note route and also prosecute those using equities for tax evasion. In its third report on steps required to check the black money menace, the SIT said it is not enough for the regulator to ban individuals and companies from stock markets. The SIT also questioned the current practice of P-Notes being transferable in nature and said Sebi needs to examine if this provision of allowing transfer of P-Notes is in any way beneficial for easing foreign investment. P-Notes or Participatory Notes are typically Offshore Derivative Instruments issued abroad by Foreign Institutional Investors, FIIs or their associates against the underlying Indian securities. To prevent misuse of exemption on Long Term Capital Gains, LTCG tax for money laundering, the panel has suggested a slew of measures such as having an effective monitoring mechanism by SEBI to study such unusual rise of stock prices. It has also suggested measures to ensure donations by cheques to prevent black money generation in education sector, religious bodies and charities. It has also sought prosecution of those donating and accepting unaccounted money under anti-corruption law. The SIT said, norms needed to check menace of betting in cricket as huge amount of black money is used and generated in betting.The SIT has also suggested steps to crackdown on shell companies which are set up by entities to evade taxes and result in generation of black money. It said, Serious Frauds investigation office, SFIO under Ministry of Corporate Affairs should actively and regularly mine the MCA 21 database to find out shell companies and share information with other law enforcement agencies. It said, once certain companies are identified through data mining, the list of such high risk companies should be shared with Central Bureau of Direct Taxes and Financial Intelligence Unit for closer surveillance. On trade-based money laundering, it said, those involved in false declaration and falsification of documents should be dealt with severely under the relevant law.