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Participatory Notes

Posted on : 07 Feb 2020

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  • P-notes are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to be a part of the Indian stock market without registering themselves directly after going through a due diligence process.
  • Participatory notes are issued by brokers and FIIs registered with SEBI. The investment is made on behalf of these foreign investors by the already registered brokers in India.
  • For example, Indian-based brokerages buy India-based securities and then issue participatory notes to foreign investors. Any dividends or capital gains collected from the underlying securities go back to the investors.
  • The brokers that issue these notes or trades in Indian securities have to mandatorily report their PN issuance status to SEBI for each quarter. These notes allow foreign high networth individuals, hedge funds and other investors to put money in Indian markets without being registered with SEBI, thus making their participation easy and smooth.

Article Related Questions

  1. Participatory Notes are regulated by which of the following agency?

  2. 1.Reserve Bank of India

    2.Security and Exchange Board of India

    3.Ministry of Finance

    4.Both option (1) and (2)

    Right Ans : Security and Exchange Board of India

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