FPIs allowed to issue participatory notes (P notes) – Careers Ready


GIFT International Financial Services Center (IFSC) living in and Securities and Exchange Board of India (SEBI) with Registered Foreign Portfolio Investors (FPIs) To 'Offshore Derivative Instruments' (ODIs) Permitted to issue, popularly known as 'Participatory Notes' (P notes) is referred to as.

related facts

  • Currently the integrated regulator for GIFT City, International Financial Services Center Authority (IFSCA), Banking Units Allows to issue notes.
  • Currently, GIFT IFSC has approximately 46 FPIs registered Are.
  • permission instructions
    • first step In 2017, the authority had permitted IFSC banking units registered as FPIs with SEBI to issue derivative instruments with underlying Indian securities.

Foreign Portfolio Investment (FPI)

  • Securities held passively by foreign investors in Foreign Portfolio Investment (FPI) and other financial assets. It does not provide the investor with direct ownership of financial assets and these are relatively liquid depending on market volatility.
  • Examples of FPI Stocks, Bonds, Mutual Funds, Exchange Traded Funds, American Depositary Receipts (ADRs) and Global Depository Receipts (GDRs).
  • FPI of any country capital accounts and is part of Balance of Payments (BOP) Is shown in.
  • BOP in a monetary year from one country to another Measures the quantity of money flow.

    • second phase In, Registered in IFSCA non-bank units, In GIFT-IFSC with Indian securities 'Derivative Instruments' issued to do As FPI with SEBI registered units It has been decided to allow.
  • other points
    • Need for changes in tax laws: IFSCA has approved all such IFSC Entities By Issuance of ODIs to non-resident investors is allowed, hence investors Exemption from Indian taxation Expanding the tax would require corresponding changes in tax laws.

'Participatory Notes' (P notes) or 'Offshore Derivative Instruments' (ODIs)

  • p-notes Issued by registered foreign portfolio investors (FPIs) to foreign investors Offshore Derivative Instruments (ODI) who are directly themselves of Indian stock exchanges without registering Want to be a part.
  • in p-notes Indian stocks, their underlying assets Are in the form of.

    • year 2023 When banking units were allowed to issue ODIs, as a percentage of total investments by FPIs in Overall ODIs There was an increase in issuance.

International Financial Services Centers Authority (IFSCA)

  • Introduction
    • Establishment: Establishment of IFSCA April 2020 In International Financial Services Centers Authority Bill, 2019 Was done under.
    • An IFSC of the domestic economy To customers outside the jurisdiction Provides essential services.
    • the headquarters: Its Headquarters GIFT City, Gandhinagar (Gujarat). Located in.
  • Work
    • this in india International Financial Services Center (IFSC) It is a unified authority for the development and regulation of financial products, financial services and financial institutions.
    • its establishment 'Ease of Doing Business' in IFSC To promote and provide a world class regulatory environment.
  • Target
    • To ensure a strong global connectivity and focus on the needs of the Indian economy as well as serving as an international financial platform for the entire region and global economy render.

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