Schedule II - Omitted - FOREIGN EXCHANGE MANAGEMENT (FOREIGN EXCHANGE DERIVATIVE CONTRACTS) REGULATIONS, 2000

13 [ **** ] ***************************** Note : 1. Has been substituted vide Notification No. 081/2003 dated 8/1/2003 2. Sub-clause (b) has been deleted and the subsequent sub-clauses (c) (d) and (e) has been renumbered as (b), (c) and (d) respectively vide Notification No. Supra 3. Has been added vide Notification No. 104/2003 dated 21/10/2003 4. Has been inserted vide Notification No. 143/2005 dated 19/12/2005 5. Has been substituted vide Notification No. 159/2007 dated 17/9/2007 before it was read as, forward contracts once cancelled shall not be rebooked but may be rolled over on or before the maturity, 6. Inserted vide Notification No. FEMA 226/2012-RB], Dated 16-3-2012 7. Inserted vide Notification No. FEMA 226/2012-RB], Dated 16-3-2012 8. Inserted vide NOTIFICATION No. FEMA. 260/2013-RB dated 18/02/2013 with effect from July 16, 2012. 9. Inserted vide NOTIFICATION No. FEMA. 260/2013-RB dated 18/02/2013 with effect from July 16, 2012. 10. Inserted vide NOTIFICATION No. FEMA. 260/2013-RB dated 18/02/2013 with effect from December 29, 2011. 11. Inserted vide Not. 384/RB-2017 - Dated 17-3-2017 12. Inserted vide NOTIFICATION G.S.R. 161(E) dated 26-02-2019 13. Omitted vide Notification No. FEMA.398/RB-2020 dated 18-02-2020 before it was read as Schedule II (See regulation 5) Foreign exchange derivative contracts permissible for a person resident outside India 1. A Registered Foreign Institutional Investor (FII) 8 [/Qualified Foreign Investor (QFI)] may enter into a forward contract with rupee as one of the currencies with an authorised dealer in India to hedge its exposure in India, Provided that - 1 (a) the value of the hedge does not exceed the market value of the underlying debt or equity instruments, provided forward contracts once booked shall be allowed to continue to the original maturity even if the value of the underlying portfolio shrinks, for reasons other than sale of securities. 2 (b) 5 forward contracts may be cancelled and rebooked subject to such terms and conditions as may be stipulated by the Reserve Bank from time to time, or may be rolled over on or before maturity. (c) the cost of hedge is met out of repatriable funds and/or inward remittance through normal banking channel, (d) all outward remittances incidental to hedge are net of applicable Indian taxes. 6 [ 1A. A registered FII 9 [/QFI] may enter into foreign currency - rupee swaps for hedging the transient capital flows relating to the Initial Public Offers (IPO) under the Application Supported by Blocked Amount (ASBA) mechanism, subject to such terms and conditions as may be stipulated by the Reserve Bank from time to time. ] 2. A non-resident Indian may enter into forward contract with rupee as one of the currencies, with an authorised dealer in India to hedge; (a) the amount of dividend due to him/it on shares held in an Indian company; (b) the balances held in Foreign Currency Non-Resident (FCNR) account or Non-Resident External Rupee (NRE) account, (c) the amount of investment made under portfolio scheme in accordance with the provisions of the Foreign Exchange Regulation Act, 1973 or under notifications issued thereunder or is made in accordance with the provisions of the Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) Regulations, 2000 and in both cases subject to the terms and conditions specified in the proviso to paragraph 1 of this Schedule. 3 2A. A non-resident Indians may, subject to conditions prescribed by the Reserve Bank of India from time to time, enter into cross currency (not involving the rupee) forward contracts to convert the balances held in FCNR (B) accounts in one foreign currency to another foreign currency in which FCNR (B) deposits are permitted to be maintained. 1 3. 'Authorised dealers may offer forward contracts to persons resident outside India to hedge the investments made in India since January 1, 1993,subject to verification of the exposure in India. These forward contracts once cancelled are not eligible to be rebooked. 3 3A. A person resident outside India may, subject to conditions prescribed by the Reserve Bank of India from time to time, enter into a forward sale contract with an authorized dealer in India to hedge the currency risk arising out of his proposed foreign direct investment in India. 3 3B. A person resident onside India having Foreign Direct Investments in India may, subject to the condition that forward cover shall be taken only after the rate has been approved by the Board, enter into forward contracts with rupee as one of the currencies to hedge the currency risk on dividend receivable by him from the Indian company. 4 4. A Foreign Institutional Investor, a Non-Resident Indian or a Person Resident outside India having Foreign Direct Investment in India, may enter into a foreign currency-rupee option contract with an authorised dealer in India, under the same terms and conditions applicable to forward contracts. 7 [ 5. A non-resident importer/exporter may enter in to a forward contract with rupee as one of the currencies or a foreign currency - rupee option contract with an Authorised Dealer in India to hedge the currency risk in respect of exports from and imports to India, invoiced in Indian Rupees, subject to such terms and conditions as may be stipulated by the Reserve Bank from time to time. ] 10 [6. A non-resident may enter in to a forward contract with rupee as one of the currencies or a foreign currency - rupee option contract or a foreign currency-INR swap with an Authorised Dealer in India to hedge the currency risk in respect of ECBs denominated in Indian Rupees, subject to such terms and conditions as may be stipulated by the Reserve Bank from time to time. ] 11 [ A non-resident may enter into a foreign exchange derivative contract with an Authorised Dealer bank in India to hedge an exposure to exchange risk of and on behalf of its Indian subsidiary in respect of the said subsidiary s transactions subject to such terms and conditions as may be stipulated by the Reserve Bank from time to time. ] 12 [ A Foreign Portfolio Investor may enter into forward contracts, foreign currency-rupee option contract, cost reduction structures or swaps with Rupee as one of the currencies with an Authorised Dealer in India to hedge the currency risk in respect of investments made under the Voluntary Retention Route (VRR) facility subject to such terms and conditions as may be stipulated by the Reserve Bank from time to time. ]