The top-performing exchange traded note (ETN) of 2007 could be no more.

That’s because Indian securities regulators have slammed the door on all exchange traded products, reports Will McClatchy of ETFZone. This effectively sticks a fork in the Barclays’ iPath MSCI India ETN (INP), and it’s going to be a particularly tough fund to say goodbye to: it ended 2007 up a whopping 87.1%. For the time being, the fund still trades, but Barclays is not issuing new certificates.

How can India do this? Easy: by limiting foreign investment in their publicly traded companies and putting caps on the numbers of shares that can be owned by foreigners, exchange traded products become illiquid and essentially useless.

India is well-known for making investments by outsiders difficult, by piling up paperwork, delays and fees. If you’re up for the challenge, direct stock ownership in India is still possible.

Meanwhile, the asset management industry in India is experiencing a growth spurt as foreign mutual fund companies swoop in, says Mariana Lemann at Ignites. Lipper says that 32 mutual fund houses manage $135 billion in assets in the country, and the fund market there has grown 66% in 2007, through November. Foreign mutual fund companies like India’s growing amount of wealth, strong middle class and huge high-net worth market.

Tags: Asia, Emerging Markets, ETNs, India