Participatory Notes (PNs) are associated with which one of the following?
✓ Correct answer: b) Foreign Institutional Investors
ExplanationParticipatory Notes (PNs) are financial instruments used by Foreign Institutional Investors (FIIs) to invest in Indian stock markets without direct registration with the Securities and Exchange Board of India (SEBI).These instru- ments allow overseas investors, including hedge funds, to gain ex- posure to Indian equities while bypassing regulatory procedures.PNs are issued by registered FIIs and sub-accounts against underlying Indian securities.While they provide easy access to foreign investment, concerns exist regarding lack of transpar- ency and potential misuse for money laundering.As per SEBI regulations, efforts have been made to increase transparency and reduce misuse of PNs in India’s financial markets.313
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