The Securities and Exchange Board of India was established on April 12, 1992 in accordance with the provisions of the Securities and Exchange Board of India Act, 1992.
In its latest circular, SEBI has restricted foreign portfolio investors (FPIs) from issuing offshore derivative instruments or participatory notes (P-Notes) for derivatives as underlying.
A Participatory Note (PN or P-Note) in the Indian context, in essence, is a derivative instrument issued in foreign jurisdictions, by a SEBI registered Foreign Institutional Investor (FII) or its sub-accounts or one of its associates, against underlying Indian securities.
The underlying Indian security instrument may be equity, debt, derivatives or may even be an index. Further, a basket of securities from different jurisdictions can also be constructed in which a portion of the underlying securities is Indian securities or indices.
