Which of the following is issued by registered foreign portfolio investors to overseas investors who want to be part of the Indian stock market without registering themselves directly?
Explanation
Option D is correct: Participatory Notes (P-Notes or PNs) are offshore derivative instruments (ODIs) issued by SEBI-registered Foreign Portfolio Investors (FPIs) to overseas investors:
– They allow foreign high-net-worth individuals and hedge funds to invest in Indian equities and debt securities without requiring direct registration with SEBI.
– The underlying securities are held by the registered FPI in India, while the returns and capital gains are passed on to the overseas subscriber holding the P-Note.
Therefore, the instrument is the Participatory Note — Option D.