Participatory Notes (P-notes)

A Participatory Note (PN or P-Note) is a derivative instrument issued in foreign jurisdictions, by a SEBI registered FII, against Indian securities—the Indian security instrument may be equity, debt, derivatives or may even be an index.

PNs are also known as Overseas Derivative Instruments, Equity Linked Notes, Capped Return Notes, and Participating Return Notes, etc.

Features of P-notes (PN)

• The investor in PN does not own the underlying Indian security, which is held by the FII who issues the PN.
• They benefit from fluctuations in the price of the underlying security since the value of the PN is linked with the ....