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Risk Management and Inter-bank Dealings Revised Guidelines relating to participation of Residents in the Exchange Traded Currency Derivatives (ETCD) market

FEMA - 90 - Dated:- 31-3-2015 - RBI/2014-15/526 A.P.(DIR Series) Circular No. 90 March 31, 2015 To All Category - I Authorised Dealer banks Madam / Sir, Attention of Authorized Dealers Category - I (AD Category - I) banks is 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), as amended from time to time and A.P. (DIR Series) Circular No. 147 dated June 20, 2014 relating to p .....

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short positions in EUR-INR, GBP-INR and JPY-INR pairs, all put together, upto USD 5 million equivalent per exchange. These limits shall be monitored by the exchanges and breaches, if any, may be reported. For the convenience of monitoring, exchanges may prescribe fixed limits for the contracts in currencies other than USD such that these limits are within the equivalent of USD 5 million. Rationalisation of documentation requirements for both Importers and Exporters 4. At present, in terms of par .....

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be produced. In the absence of a CS, the Chief Executive Officer (CEO) or the Chief Operating Officer (COO) shall co-sign the undertaking along with the CFO. Increase in eligible limit for Importers hedging contracted exposure 5. At present, importers are permitted to hedge their contracted exposures in the ETCD market upto 50 per cent of their eligible limit as defined in para (2)(b)(i) of the above circular. With a view to bringing at par both exporters and importers, it has now been decided t .....

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of the above circular remain unchanged. 7. A matrix indicating the existing and the revised positions is enclosed for easy reference. 8. This circular has been issued under Sections 10 (4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and is without prejudice to permissions / approvals, if any, required under any other law. Yours faithfully (R Subramanian) Chief General Manager Encls: As above Annex to A.P. (DIR Series) Circular No. 90 dated March 31, 2015 Paragraph no. Ex .....

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s well as short positions in EUR-INR, GBP-INR and JPY-INR pairs, all put together, upto USD 5 million equivalent per exchange. These limits shall be monitored by the exchanges and breaches, if any, may be reported. (2) (b) (i) For participants who are exporters or importers of goods and services, the eligible limit up to which they can take appropriate hedging positions in ETCDs will be determined as (a) higher of the (I) average of the last three years export turnover, or (II) previous year s e .....

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rt turnover (2) (b) (iii) Based on the above certificate, a trading member can book ETCD contracts upto fifty per cent of the eligible limit [as at paragraph (2)(b)(i)] on behalf of the concerned customer. If a participant wishes to take position beyond the fifty per cent of the eligible limit in the ETCD, it has to produce a certificate from the statutory auditors certifying that the sum total of the outstanding OTC derivative contracts and outstanding ETCD contracts has generally been in corre .....

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