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According to SEBI data, the value of participatory note (P-note) investments in Indian capital markets increased to Rs. 63,288 crore till July 2020-end. This is the fourth consecutive monthly rise in investments through P-notes.


What are Participatory Notes (P-notes) 

  • P-notes are Offshore Derivative Instruments (ODIs) 
  • They are issued by brokers and foreign institutional investors (FIIs) registered with SEBI. 
  • The investment is made on behalf of foreign investors by the already registered brokers in India who wish to be a part of the Indian stock markets without registering themselves directly.
  • P-notes have Indian shares as their underlying assets.
  • These instruments are used for making investments in the stock markets. 
  • P-notes are not used within the country. 
  • They are used outside India for making investments in shares listed in the Indian stock market. 
  • That is why they are called offshore derivative instruments.
  • 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.
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