What are P-Notes and why is it being reported that FPIs are relying less on P-Notes route nowadays? Is that correct?
Answer
Answer
Over the last few years, the importance of P-notes is gradually reducing. P-Notes or participatory notes are issued to investors who do not want to go through the regulatory hassles of registering as FPIs and so they open sub-accounts with the FPI and the FPI in turn issues P-notes against these. In the last 2 years, SEBI has tightened the P-Note norms by making higher disclosure mandatory and also by increasing the fees and costs of P-Notes. The result is there to see in the table below.
Month
Total value of PNs (Rs. in crore)
Total value of PNs excluding derivatives (Rs. in crore)
Assets Under Custody of FPIs (Rs. in crore)
Percentage of PNs of total AUC
Percentage of PNs excluding derivatives of total AUC
Apr-10
1,54,340
1,40,397
9,27,194
16.6
15.1
May-10
1,59,927
1,36,415
8,83,379
18.1
15.4
Jun-10
1,68,016
1,38,881
9,27,468
18.1
15.0
Jul-10
1,65,749
1,44,343
9,71,022
17.1
14.9
Aug-10
1,63,657
1,47,473
9,99,130
16.4
14.8
Sep-10
2,00,927
1,45,383
11,24,352
17.9
12.9
Oct-10
1,82,056
1,48,142
11,51,339
15.8
12.9
Nov-10
1,88,325
1,54,950
11,36,754
16.6
13.6
Dec-10
1,75,584
1,41,894
11,64,623
15.1
12.2
Jan-11
1,74,485
1,34,838
10,57,474
16.5
12.8
Feb-11
1,71,601
1,26,329
10,16,892
16.9
12.4
Mar-11
1,75,097
1,33,098
11,06,550
15.8
12.0
Apr-11
1,66,444
1,18,230
11,06,718
15.0
11.0
May-11
2,11,199
1,61,210
10,81,996
20.0
15.0
Jun-11
1,53,291
1,07,640
10,86,388
14.0
10.0
Jul-11
1,50,414
1,02,954
10,77,096
14.0
10.0
Aug-11
1,52,288
1,00,454
9,85,893
15.0
10.0
Sep-11
1,75,291
1,15,311
9,79,164
18.0
12.0
Oct-11
1,80,002
1,16,475
10,25,530
18.0
11.0
Nov-11
1,79,035
1,17,532
9,38,098
19.0
13.0
Dec-11
1,38,711
93,563
9,17,930
15.1
10.2
Jan-12
1,57,697
1,14,092
10,43,130
15.1
10.9
Feb-12
1,83,151
1,28,606
11,15,648
16.4
11.5
Mar-12
1,65,832
1,15,332
11,07,399
15.0
10.4
Apr-12
1,30,012
86,785
10,93,955
11.9
7.9
May-12
1,28,895
65,472
10,40,547
12.4
6.3
Jun-12
1,29,851
69,523
10,90,359
11.9
6.4
Jul-12
1,29,586
68,677
10,96,492
11.8
6.3
Aug-12
1,41,710
68,450
11,13,894
12.7
6.1
Sep-12
1,46,600
82,379
12,19,163
12.0
6.8
Oct-12
1,75,829
95,536
12,21,900
14.4
7.8
Nov-12
1,77,164
94,658
12,89,612
13.7
7.3
Dec-12
1,51,084
1,01,666
13,35,189
11.3
7.6
Jan-13
1,62,139
1,05,910
13,70,866
11.8
7.7
Feb-13
1,64,271
1,05,258
13,32,496
12.3
7.9
Mar-13
1,47,905
1,04,229
13,36,557
11.1
7.8
Apr-13
1,57,578
1,11,486
13,91,619
11.3
8.0
May-13
1,68,263
1,10,904
14,38,980
11.7
7.7
Jun-13
1,47,498
99,763
13,49,184
10.9
7.4
Jul-13
1,48,118
94,814
12,93,687
11.5
7.3
Aug-13
1,64,817
1,02,224
12,42,154
13.3
8.2
Sep-13
1,71,154
1,06,527
13,10,194
13.1
8.1
Oct-13
1,83,862
1,11,847
14,16,560
13.0
7.9
Nov-13
1,83,237
1,11,567
14,06,462
13.0
7.9
Dec-13
1,67,566
1,15,181
14,64,355
11.4
7.9
Jan-14
1,63,348
1,11,646
14,26,875
11.5
7.8
Feb-14
1,72,738
1,13,600
14,73,802
11.7
7.7
Mar-14
2,07,639
1,35,821
15,93,869
13.0
8.5
Apr-14
1,87,486
1,27,627
16,06,596
11.7
7.9
May-14
2,11,740
1,45,258
17,70,781
12.0
8.2
Jun-14
2,24,248
1,58,532
19,09,400
11.7
8.3
Jul-14
2,08,284
1,58,303
19,71,822
10.6
8.0
Aug-14
2,11,499
1,61,682
20,47,175
10.3
7.9
Sep-14
2,22,394
1,68,322
20,84,161
10.7
8.1
Oct-14
2,65,675
1,86,496
21,71,276
12.2
8.6
Nov-14
2,49,210
1,87,039
22,67,910
11.0
8.2
Dec-14
2,36,677
1,90,595
22,45,156
10.5
8.5
Jan-15
2,68,033
2,08,783
24,02,441
11.2
8.7
Feb-15
2,71,752
2,08,447
24,56,321
11.1
8.5
Mar-15
2,72,078
2,11,605
24,11,810
11.3
8.8
Apr-15
2,68,168
2,06,374
23,55,308
11.4
8.8
May-15
2,84,826
2,13,163
24,13,049
11.8
8.8
Jun-15
2,75,436
2,08,578
23,86,457
11.5
8.7
Jul-15
2,72,053
2,05,444
24,53,014
11.1
8.4
Aug-15
2,53,310
1,88,027
23,13,548
10.9
8.1
Sep-15
2,53,875
1,86,849
23,03,513
11.0
8.1
Oct-15
2,58,287
1,92,630
23,44,179
11.0
8.2
Nov-15
2,54,600
1,91,190
23,08,769
11.0
8.3
Dec-15
2,35,534
1,80,072
23,20,539
10.1
7.8
Jan-16
2,31,317
1,71,732
22,00,837
10.5
7.8
Feb-16
2,17,740
1,60,946
20,43,139
10.7
7.9
Mar-16
2,23,077
1,69,470
22,24,537
10.0
7.6
Apr-16
2,12,132
1,61,280
22,81,346
9.3
7.1
May-16
2,15,338
1,60,867
23,48,618
9.2
6.8
Jun-16
2,10,731
1,61,379
23,87,685
8.8
6.8
Jul-16
2,12,179
1,62,921
25,14,038
8.4
6.5
Aug-16
2,16,232
1,58,848
25,65,304
8.4
6.2
Sep-16
2,12,509
1,52,624
25,56,244
8.3
6.0
Oct-16
1,99,987
1,43,235
25,77,073
7.8
5.6
Nov-16
1,79,648
1,26,596
24,09,042
7.5
5.3
Dec-16
1,57,306
1,12,243
23,48,007
6.7
4.8
Jan-17
1,75,088
1,19,309
24,56,716
7.1
4.9
Feb-17
1,70,191
1,15,413
25,63,431
6.6
4.5
Mar-17
1,78,437
1,24,277
27,05,729
6.6
4.6
Apr-17
1,68,545
1,28,380
27,86,083
6.0
4.6
May-17
1,80,718
1,33,045
28,56,637
6.3
4.7
Jun-17
1,65,241
1,32,785
28,83,104
5.7
4.6
Jul-17
1,35,297
1,27,075
30,55,984
4.4
4.2
Aug-17
1,25,037
1,16,393
30,35,509
4.1
3.8
Sep-17
1,22,684
1,13,706
30,03,476
4.1
3.8
Oct-17
1,31,006
1,20,629
31,70,194
4.1
3.8
Nov-17
1,28,639
1,23,567
31,88,354
4.0
3.9
Dec-17
1,52,243
1,49,243
32,80,283
4.6
4.5
Jan-18
1,19,556
1,16,472
33,81,677
3.5
3.4
Feb-18
1,06,760
1,05,137
32,41,324
3.3
3.2
Mar-18
1,06,403
1,02,726
31,48,349
3.4
3.3
Apr-18
1,00,245
99,595
33,19,175
3.0
3.0
May-18
93,497
89,974
31,77,685
2.9
2.8
Jun-18
83,688
80,279
31,88,252
2.6
2.5
Jul-18
80,341
76,769
33,34,518
2.4
2.3
Aug-18
84,647
80,882
34,31,511
2.5
2.4
Sep-18
79,548
75,641
31,38,334
2.5
2.4
Oct-18
66,587
65,147
29,82,324
2.2
2.2
Nov-18
79,247
78,015
31,08,886
2.5
2.5
Dec-18
79,513
78,558
31,38,205
2.5
2.5
What clearly emerges from the table above is that the volumes of P-Notes have progressively come down and also the percentage share of P-notes in the overall FPI game has come down substantially and that is largely thanks to the stringent regulations surrounding the P-Note issue and maintenance.