Consider the following statements about Participatory Notes PN 1 Participatory notes PNs are the typ...........

Economic Affairs Foreign Investment

Consider the following statements about Participatory Notes (PN):

1.Participatory notes (PNs) are the types of derivative instruments issued in foreign jurisdiction whose underlying assets are equity, debt, derivatives or any index.

2.All the PNs are to be registered with SEBI in order to invest in the Indian Stock Exchanges.

3.The PN holder also enjoys voting rights in relation to security/shares referenced by the PN.

How many of the statements given above are not correct?

Only One

Only Two

All Three

None

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Explanation:

Participatory notes (PNs) are types of derivative instruments issued in foreign jurisdictions whose underlying assets are equity, debt, derivatives, or any index: This statement is correct. Participatory notes are financial instruments used by investors to invest in Indian securities without registering with the Securities and Exchange Board of India (SEBI). They derive their value from underlying assets such as equity, debt, derivatives, or indices.

All the PNs are to be registered with SEBI to invest in the Indian Stock Exchanges: This statement is incorrect. Participatory notes are not required to be registered with SEBI. They are designed to provide anonymity to investors, and the issuance and trading of PNs occur outside the purview of SEBI.

The PN holder also enjoys voting rights in relation to security/shares referenced by the PN: This statement is incorrect. PN holders do not enjoy voting rights in Indian companies. The voting rights remain with the original issuer of the security, and the PN holder is not directly recognized as a shareholder in the company.