Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword
Like this
5Activity
0 of .
Results for:
No results containing your search query
P. 1
Participatory Notes

Participatory Notes

Ratings: (0)|Views: 122|Likes:
Published by vishnu0751

More info:

Published by: vishnu0751 on Oct 29, 2009
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as DOC, PDF, TXT or read online from Scribd
See more
See less

02/03/2011

pdf

text

original

 
Participatory notes
From Wikipedia, the free encyclopedia
Jump to:navigation, search This article
is anorphan, as few or no other articles link to it
. Please introduce linksto this page from other articles related to it.
(October 2007)
This article
needs additionalcitationsforverification.
Please helpimprove this articleby adding reliable references. Unsourced material may bechallengedand removed. 
(April 2007)
Participatory notes
(
PNs / P-Notes
) are instruments used by investors or hedge fundsthat arenot registered with theSEBI(Securities & Exchange Board of India) to invest inIndian  securities.
Participatory notes
are instruments that derive their value from an underlyingfinancial instrument such as an equity share and, hence, the word, 'derivative instruments'.SEBI  permitted FIIs to register and participate in the indian stock market in 1992.Indian based brokerages buy Indian-based securities and then issue PNs to foreign investors. Anydividendsor capital gainscollected from the underlying securities go back to the investors. Participatory notes are instruments used for making investments in thestock markets. However,they are not used within the country. They are used outside India for making investments inshares listed in that country. That is why they are also called offshore derivative instruments.In the Indian context, foreign institutional investors (FIIs) and their sub-accounts mostly usethese instruments for facilitating the participation of their overseas clients, who are not interestedin participating directly in the Indian stock market. For example, Indian-based brokerages buyIndia-based securities and then issue participatory notes to foreign investors. Any dividends ocapital gains collected from the underlying securities go back to the investors. According to anexpert group constituted by the finance ministry in India, in August 2004, participatory notesconstituted about 46 per cent of the cumulative net investments in equities by FIIs.
Any entity investing in participatory notes is not required to register with SEBI (Securities andExchange Board of India), whereas all FIIs have to compulsorily get registered. Trading through participatory notes is easy because participatory notes are like contract notes transferable byendorsement and delivery. Secondly, some of the entities route their investment through participatory notes to take advantage of the tax laws of certain preferred countries. Thirdly, participatory notes are popular because they provide a high degree of anonymity, which enableslarge hedge funds to carry out their operations without disclosing their identity.Participatory notes in brief is as follows :What are participatory notes or PNs? Participatory notes are instruments used by foreign fundswhich are not registered to trade in domestic Indian Capital Markets. PNs are derivative

Activity (5)

You've already reviewed this. Edit your review.
1 hundred reads
sourabh31 liked this
nilayudekannan liked this
abarent liked this
bhus_mesh liked this

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->