Ever heard of Participatory Notes, or P-Notes? These are financial instruments where a foreign investor can invest in Indian securities market through a Indian registered broker or FII, who in turn invest in Indian markets on their behalf.
However, the risk is higher, as the true identity of the investor isn't always disclosed, raising concerns about transparency and market volatility. Indian regulators have raised red flags due to the potential misuse for money laundering or market manipulation. To manage this risk, authorities have strengthened regulations on P-Notes by increasing disclosure requirements and placing restrictions on their usage.
Despite these risks, they remain popular for foreign investors seeking quick access to Indian markets.
“Participatory Notes: Quick Access with high Risks”
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