Concept

♤ Participatory Notes or P-Notes are financial instruments issued by foreign institutional investors to investors and hedge funds who wish to invest in Indian stock markets. These are also called Offshore Derivative Instruments.

♤ P-Notes, mostly used by overseas HNIs (high net worth individuals), hedge funds and other foreign institutions, allow such investors to invest in Indian markets through registered foreign institutional investors (FIIs).

♤ Till a few years ago, P-Notes used to account for more than 50 per cent of the total FII investments, but their share has fallen after SEBI tightened the disclosure norms and other regulations for such investments.