Example

♤ An investor deposits funds with the U.S. or European operations of a registered foreign institutional investor (FII), such as HSBC or Deutsche Bank.

♤ The investors then inform the bank the Indian security or securities they wish to purchase. Funds transfer from the investor to the FII account, and the FII issues the participatory notes to the client and buys the underlying stock or stocks in the correct quantities from the Indian marketplace.

♤ The investor is eligible to receive dividends, capital gains and any other payouts due to stockholders holding the shares of the Indian company.