Answer: Derivatives issued by registered FPIs or FIIs to overseas investors
Notes: Participatory Notes (P-Notes) are offshore derivative instruments issued by SEBI-registered Foreign Portfolio Investors (FPIs) or Foreign Institutional Investors (FIIs) to overseas investors. P-Notes allow these investors to gain exposure to Indian securities without registering directly with SEBI. SEBI began regulating P-Notes in 2007 to ensure greater transparency and curb misuse. P-Notes accounted for less than 2% of FPI assets in India as of 2023.
