What are p-note, use of P-Note? [participatory note]

 

You all must have heard the name of the P-Note and you must have also wanted to know what is this P-Note and what are the rules in India regarding it, and what rules make it an institution in India. , In today's article, all the important facts related to P-Note are given in easy language and interestingly,

 

Through this article, you will easily understand the following important facts, such as -
What are P-note?
Who issues a p-note?
What is the provision in India regarding P-Note?
What is the use of P-Note?
What changes has SEBI made in its rules regarding P-Note?
Benefits of P-Note and disadvantages of P-Note etc.

Let's talk first of all -

What are these P-notes?

The full name of  p-note is participatory note,

It is a kind of off-shore derivative instrument, or simply put, a special type of document that investors who want to invest in the Indian stock market and Indian securities without registering with SEBI, use it

 Participatory Notes (P -notes) to foreign investors or foreign investors in India issue foreign units of foreign brokerage firms or domestic brokerage firms registered with SEBI (Securities and Regulation Board of India), brokerage purchases in Indian securities such as shares, derivatives And take their fees and issue Participatory Notes (P-Note) to their client on them,

What is the use of a p-note (participatory note)

Friends, Participatory Notes are a type of agreement or agreement in which a person can take advantage of the Indian capital market or the stock market without disclosing or registering his identity to SEBI, that is, investing in the Indian stock market,

Now a question may be arising in your mind that, why does someone use p-note not registered through SEBI?

Friends, there are many investors who for some reason either do not want to disclose their identity or their investment amount is low due to which they do not want to register, as well as some foreigners are not disclosing their identity to Indians. Choosing to invest in the capital market, all of them would get the option in the form of a P note i.e. Participatory Note,

 Now you must be thinking that if a person who does not want to be registered in India, why is he given the option of Participatory Note, after all

What is the importance or necessity of participatory note?

Friends, as we all know, there are many schemes to attract foreign investment in India and this foreign investment is also necessary for India, because in order to meet the various needs of the very large population of India Money is required and the economic situation in India at present is not so strong that it can fulfill the needs of such a large population by its own, and economic activities that are conducted within the country, so it becomes necessary that Foreigners should bring their capital to India, which will also help to develop India's infrastructure, as well as help in other developmental work.

Keeping this objective in mind, the participatory note system has been adopted, that is, the option of investment is made available to those who wish to invest but do not want to reveal their identity if the option of participatory note is available. If not, then those foreign investors will not invest in India, due to which we will not be able to get foreign capital, due to which many of our developmental processes will be stopped.

Loss or concerns regarding P-note

But there is also a doubt about the arrangement of participatory notes that, in this, any wrong person or wrong institution can also invest in Indian capital market and stock market because their identity is not revealed in it, maybe that someone Whether a person of criminal interest or a restricted institution,

In order to address all such concerns, SEBI[Securities and Exchange Board of India ]has recently made some stringent provisions regarding the rules of P-Note.

This provision is as follows

The new provisions regarding Sebi's P-Note are now -

If an investor has a 25% share in the P-Note, then his / her KYC i.e. necessary documents to ensure his / her identity, it has been made mandatory to adopt the procedure.

Not only this, KYC will be held even if the share of trust partner firm etc. in P Notes is 15%.

Several agreements have been signed with Mauritius and other countries to curb tax evasion in India, after which SEBI is now changing its rules to curb the process of money laundering.

 Also, now KYC will be necessary in case of transfer of P-Note, and foreign investors will have to keep full details of the transfer,

So friends, what is the P note in today's article? And information related to Participatory Notes / P-NOTE INFORMATION IN HINDI you have found, I hope you liked this article, if you want to get similar interesting information, you can also subscribe by email on this website. !!