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TMI BlogForeign investment by Qualified Foreign Investors (QFIs) – Hedging facilitiesX X X X Extracts X X X X X X X X Extracts X X X X ..... invited to the Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000 dated May 3, 2000 [Notification No. FEMA/25/RB-2000 dated May 3, 2000] and A.P. (DIR Series) Circular No.32 dated December 28, 2010, as amended from time to time. 2. In terms of A.P. (DIR Series) Circular No.8 dated August 9, 2011, A.P. (DIR Series) Circular No. 42 dated November 3, 2011, A.P. (D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Reserve Bank from time to time. 3. It has now been decided to allow QFIs to hedge their currency risk on account of their permissible investments (in equity and debt instruments), as per the details given in the Annex. 4. Necessary amendments to the Notification No. FEMA.25/RB-2000 dated May 3, 2000 [Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000] are b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Blocked Amount (ASBA) mechanism. Products Forward foreign exchange contracts with rupee as one of the currencies and foreign currency-INR options. Foreign Currency - INR swaps for IPO related flows. Operational Guidelines, Terms and Conditions QFIs are allowed to hedge the currency risk on account of their permissible investments with the AD Category-I bank with whom they are maintaining th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, be rolled over on or before maturity. The cost of hedge should be met out of repatriable funds and /or inward remittance through normal banking channel. All outward remittances incidental to the hedge are net of applicable taxes. For IPO related transient capital flows QFIs can undertake foreign currency- rupee swaps only for hedging the flows relating to the IPO under the ASBA mechanis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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