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TMI BlogParticipation of FPIs in the Currency Derivatives segment and Position limits for currency derivatives contractsX X X X Extracts X X X X X X X X Extracts X X X X ..... rrency derivative segment to the extent of their Indian rupee exposure in India". 2. Pursuant to notification dated May 21, 2014 on Foreign Exchange Management (Foreign Exchange Derivative Contracts) (Amendment) Regulations, 2014, Reserve Bank of India (RBI) vide A.P. (DIR Series) Circular no. 148 dated June 20, 2014 has allowed FPIs, who are eligible to invest in securities as laid down in Schedules 2, 5, 7 and 8 of Foreign Exchange Management (Transfer or Issue of Security by a person resident outside India) Regulations, 2000, to enter into currency futures or exchange traded currency options contracts, subject to terms and conditions mentioned in the said circular. Copy of the RBI circular is enclosed for reference. Participation of FP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exchanges shall restrict the FPI from increasing its existing short positions or creating new short positions in the currency pair till such time FPI complies with the said requirement. (c) To take long positions in the permitted currency pair in excess of USD 10 million / EUR 5 million / GBP 5 million / JPY 200 million, as applicable, FPIs shall be required to have an underlying exposure in Indian debt or equity securities, including units of equity/debt mutual funds. 6. Primary onus for ensuring compliance with the above provisions shall rest with the FPI. 7. With regard to enabling monitoring of positions of FPIs as per the provisions of the RBI A.P. (DIR Series) Circular no. 148 dated June 20, 2014, the following shall be implemente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ositions in the permitted currency pairs in excess of USD 10 million / EUR 5 million / GBP 5 million / JPY 200 million, as applicable, subject to the conditions specified the RBI A.P. (DIR Series) Circular no. 147 dated June 20, 2014. 10. Stock brokers shall comply with the requirements mentioned in the RBI A.P. (DIR Series) Circular no. 147 dated June 20, 2014 while dealing with domestic clients and shall bring to the notice of their clients the requirements specified in this circular and the aforementioned RBI circular. 11. The primary onus of complying with the relevant provisions of the RBI A.P. (DIR Series) Circular no. 147 dated June 20, 2014 shall rest with the client and in case of any contravention, the client shall render itself ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for Clients and Category III FPIs: The position limits shall be as given in the table below. Currency Pair Position limits USD-INR Gross open position across all contracts shall not exceed 6% of the total open interest or USD 10 million, whichever is higher. EUR-INR Gross open position across all contracts shall not exceed 6% of the total open interest or EUR 5 million, whichever is higher. GBP-INR Gross open position across all contracts shall not exceed 6% of the total open interest or GBP 5 million, whichever is higher. JPY-INR Gross open position across all contracts shall not exceed 6% of the total open interest or JPY 200 million, whichever is higher. 13. Stock exchanges shall impose appropriate penalties for violation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 (1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market. Yours faithfully, Maninder Cheema Deputy General Manager email: [email protected] Enclosures: (i) Reserve Bank of India A.P. (DIR Series) Circular no. 148 dated June 20, 2014 on 'Risk Management and Inter-bank Dealings: Guidelines relating to participation of Foreign Portfolio Investors (FPIs) in the Exchange Traded Currency Derivatives (ETCD)'. (ii) Reserve Bank of India A.P. (DIR Series) Circular no. 147 dated June 20, 2014 on 'Risk Management and Inter-bank Dealings: Guidelines relating to participation of Residents in the Exchange Traded Cur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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