Scheme of FII Trading in all Exchange Traded Derivative Contracts

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..... I's total investment. The SEBI Board vide meeting, dated December 28, 2001 has permitted FIIs to trade in all exchange traded derivative contracts and laid down the position limits for the trading of FIIs and their sub-accounts. RBI vide Circular ECO.CO.FII/515/11.01.01/(16) 2000-01, dated February 4, 2002 permitted FIIs to trade in all the exchange traded derivative contracts subject to the position limits prescribed hereunder. The FIIs shall be under obligation to adhere to the position limits prescribed for them and their sub-accounts. The FIIs shall also comply with the procedure for trading, settlement and reporting as prescribed by the derivative exchange/Clearing House/Clearing Corporation from time to time. The position limits for .....

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..... of each trading day. For this purpose, the Derivative Segment of the Exchanges and their Clearing House/Clearing Corporation would implement the following procedure for the monitoring of the FII and the sub-account's position limits : 1. The FII would be required to notify the names of the Clearing Member/s and Custodian through whom it would clear its derivative trades to exchanges and their Clearing House/Clearing Corporation. 2. A unique code would be assigned by the exchanges and/or the Clearing House/Clearing Corporation to each registered FII intending to trade in derivative contracts. 3. The FII would be required to confirm all its positions and the positions of all its sub-accounts to the designated Clearing Members online bu .....

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..... osition limits by the sub-account, to the derivative segment of the exchange and their Clearing House/Clearing Corporation and the FII/Custodian/Clearing Member/s would ensure that the sub-account does not take any fresh positions in any derivative contracts in that underlying. However the sub-account would be permitted to execute offsetting transactions so as to reduce its open position. 9. The exchanges may assign unique sub-account codes on the lines of unique client codes to each sub-account of a FII, which would enable the derivative segment of the exchange and their Clearing House/Clearing Corporation to monitor the position limits specified for sub-accounts. II. Computation of the Position Limits The position limits would be comp .....

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