These are the offshore derivative instruments, also known as the P-Notes or PNs. These instruments are issued by the registered Foreign Institutional Investors (FIIs) to overseas investors, who wish to invest in the Indian stock markets without registering themselves with the market regulator, the Securities and Exchange Board of India (SEBI).
There are two routes for foreign investors to enter into the Indian securities market i.e. through FDI or FII, highly regulated by SEBI. However, Participatory notes are the alternative available to the Foreign Investors to enter into Indian market without registering themselves with SEBI.
In many ways this is similar to ADR Process. Generally, Indian regulators are not happy with these instruments as they have no way to trace down that with whom the securities are underlying.
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- Question 1 of 11
- Question 2 of 11
Choose the correct regulation in relation to the underwritersCorrect
These regulations were notified by SEBI in exercise of the powers conferred by Section 30 of SEBI Act, 1992 with the approval of Central Government. They came into force from 8th October, 1993.Incorrect
- Question 3 of 11
For registration with SEBI as underwriters, application is madein which formCorrect
Regulation 3 lays down that the applicant seeking the certificate shall apply to SEBI in form A.Incorrect
- Question 4 of 11
In case of any discripency in furnishing additional information, resulting to rejection of the application, the applicant is given a time ofCorrect
SEBI may however extend the time by another one month in order to enable the applicant to comply with the requirements of SEBI.Incorrect
- Question 5 of 11
To fulfill the capital adequacy requirement as mentioned in the Regulation 7, the Networth for being an underwriter should not be less thanCorrect
The networth should not be less than ` 20 lakhs.Incorrect
- Question 6 of 11
The total underwriting obligations under all the agreements shall not exceedCorrect
The total underwriting obligations under all the agreements shall not exceed 20 times the networth.Incorrect
- Question 7 of 11
Books of accounts and records should be preserved forCorrect
Regulation 16 to 18 relate to maintenance of proper accounts, books and records and their preservation for 5 years and SEBIâ€™s power call for and obtain information from the underwriter.Incorrect
- Question 8 of 11
Underwriter should subscribe for the securities, in the event of being called upon, withinCorrect
Every underwriter, in the event of being called upon to subscribe for securities of a body corporate pursuant to an agreement shall subscribe to such securities within 45 days of the receipt of such intimation from such body corporate.Incorrect
- Question 9 of 11
Compliance Officer is appointed under which regulationCorrect
Regulation 17A requires every underwriter to appoint a compliance officer responsible for monitoring the compliance of the Act, rules and regulations, notifications, guidelines, instructions etc. issued by SEBI or the Central Government and for redressal of investorsâ€™ grievances.Incorrect
- Question 10 of 11
Audit can be ordered by SEBICorrect
Regulation 24 authorities SEBI to appoint a qualified auditor to investigate into the affairs and the accounts of the underwriter with the same powers as applicable in the case of SEBI appointed inspecting authority.Incorrect
- Question 11 of 11
Inspection report is submitted under which regulationCorrect
Regulations 22 relate to submission of inspection report to SEBI.Incorrect