Login With Google
Investments via P-notes
Why is it in news?
- Investments through participatory notes (P-notes) in the domestic capital market soared to ₹63,288 crore till July-end.
- This is the fourth consecutive monthly rise.
About Participatory notes (P-notes):
- P-notes are issued by registered foreign portfolio investors to overseas investors who wish to be a part of the Indian stock market.
- These are financial instruments used by investors and hedge funds to invest in the Indian securities, and no registration is required with the SEBI.
- They, however, need to go through a due diligence process.
- Benefit of P-notes: They are useful to the Indian economy as they can provide quicker means of raising funds for the Indian listed companies and economy.
- Concern: Because of the anonymous nature of the instrument, these investors could be beyond the reach of Indian regulators. Further, there is a view that it is being used in money laundering.