P-Notes & FII

Concept:  P-Notes & FII
Topic: Economy
Category: Black Money, Investments, FDI
Related News: IE, Jan 23
CNA mentions: 1 (Jan 23)                

P-Notes & FII

Participatory Notes or P-Notes (PNs) are instruments that are issued by registered FIIs (Foreign Institutional Investor) to overseas investors who want to invest in the stock markets in India, without registering themselves with the market regulatory authority SEBI. They are used by clients of FIIs who do not wish to directly participate in the stock market in India, but do it through the FIIs using PNs. FIIs were first permitted by SEBI to trade in stock markets in India in 1992.

Institutional investor is an entity that pools money in order to buy securities, real estate and other investment assets, or originate loans. Banks, hedge funds, insurance companies, pensions, endowments, mutual funds and investment advisors can be called institutional investors. The term also can be applied for operating companies that invest in such type of assets. Some institutional investors try to influence corporate governance by using their voting rights in investments and they are called activist institutional investors.