TMI BlogIntroduction of Rupee derivatives at International Financial Services Centres (IFSC)X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank of India, a copy of which is annexed (Annex I). 4. Currency options contracts may be listed on recognised stock exchanges at IFSCs subject to the Currency Options in International Financial Services Centre (Reserve Bank) Directions, 2020 (Notification No.FMRD.FMD.02 /ED(TRS)-2020 dated January 20, 2020), issued by the Reserve Bank of India, a copy of which is annexed (Annex II). 5. Necessary amendments to the Foreign Exchange Management (International Financial Services Centre) Regulations, 2015 ( Notification No. FEMA. 339/2015-RB dated 2nd March, 2015 ) have been notified in the Official Gazette vide Gazette Id no.CG-DL-E-17012020-215530 dated January 16, 2020 a copy of which is annexed (Annex-III). 6. Amendments to Currency Futures (Reserve Bank) Directions, 2008 (Notification No.FED.1/DG(SG) - 2008 dated August 6, 2008), as amended from time to time, and Exchange Traded Currency Options (Reserve Bank) Directions, 2010 (Notification No. FED.01/ED(HRK) - 2010 dated July 30, 2010), as amended from time to time, is annexed as Annex IV V respectively. 7. The above Directions have been issued under Section 45W of the Reserve Bank of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mic Zones Act, 2005 (Act 28 of 2005). vi. Recognised stock exchange means a stock exchange recognised under section 4 of Securities Contracts (Regulations) Act, 1956 (Act 42 of 1956). vii. SEBI means the Securities and Exchange Board of India established under the Securities and Exchange Board of India Act, 1992 (15 of 1992). viii. FBIL Reference rate means the rates of currency pairs computed and published on a daily basis, on all Mumbai business days, by Financial Benchmarks India Private Limited. ix. The words and expressions used but not specified in these directions shall have the same meanings respectively assigned to them in the Act. 3. Permission - i. Currency futures contracts are permitted in any currency pair involving the Rupee or otherwise. ii. Persons resident in India, as defined in clause (v) of section 2 of Foreign Exchange Management Act, 1999 (Act 42 of 1999), unless specifically permitted by the Reserve Bank, shall not be eligible to undertake currency futures contracts. iii. Persons resident outside India, as defined in section 2(w) of Foreign E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Reserve Bank - The Reserve Bank may from time to time modify the eligibility criteria for the participants, modify participant-wise position limits, prescribe margins and / or impose specific margins for identified participants, fix or modify any other prudential limits, or take such other actions as deemed necessary in public interest, in the interest of financial stability and orderly development and maintenance of foreign exchange market in India. (T. Rabi Sankar) Executive Director ANNEX II Notification No. FMRD.FMD.02 /ED(TRS)-2020 dated January 20, 2020 Currency Options in International Financial Services Centre (Reserve Bank) Directions, 2020 The Reserve Bank of India having considered it necessary in public interest and to regulate the financial system of the country to its advantage, in exercise of its powers conferred by section 45W of the Reserve Bank of India Act, 1934 and of all the powers enabling it in this behalf, hereby gives the following directions to all the persons dealing in currency options listed on recognised stock exchange in the International Financial S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nge Management Act, 1999 (Act 42 of 1999) , unless specifically permitted by the Reserve Bank, shall not be eligible to undertake currency option contracts. iii. Persons resident outside India, as defined in section 2(w) of Foreign Exchange Management Act, 1999 (Act 42 of 1999), shall be eligible to undertake currency option contracts. 4. Features of currency option contracts Currency option contracts shall have the following features: i. The premium for all currency option contracts shall be quoted in a currency other than the Indian Rupee. ii. The size, maturity and other specifications of the currency option contracts shall be decided by the recognised stock exchange in consultation with SEBI. iii. All currency option contracts shall be settled in a currency other than the Indian Rupee. iv. The settlement price for currency option contracts involving Rupee shall be the FBIL Reference rate, where available, on the expiry date of the contract. For currency option contracts involving Rupee where FBIL reference rates are not available and for other currency pairs, the mechanism for arriving at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Reserve Bank hereby makes the following amendments in the Foreign Exchange Management (International Financial Services Centre) Regulations, 2015 ( Notification No. FEMA.339/2015-RB dated March 2, 2015 ), namely:- 1. Short title and commencement- i. These regulations may be called the Foreign Exchange Management (International Financial Services Centre) (Amendment) Regulations, 2020. ii. These regulations shall come into force with effect from the date of their publication in the Official Gazette. 2. Amendment- The following proviso be added to principal regulation 4: Provided that, Reserve Bank may, through a general or specific permission, allow a financial institution or a branch of a financial institution to conduct such business in Indian Rupee with such persons, whether resident or otherwise as it may determine. (T Rabi Sankar) Executive Director Footnote- The principal regulations were published in the Gazette of India Extraordinary Part-II, Section 3, Sub-Section (i) on March 03, 2015 vide G.S.R.No.218(E). ANNEX IV ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l the persons dealing in exchange traded currency options. 1. Short title and commencement of the directions These directions may be called the Exchange Traded Currency Options (Reserve Bank) (Amendment) Directions, 2020 and they shall come into force with effect from January 20, 2020. 2. Amendment to the Exchange Traded Currency Options (Reserve Bank) Directions, 2010 i. Paragraph 4(g) shall be substituted by the following: g. The settlement price for currency option contracts involving Rupee shall be the FBIL Reference rate, where available, on the expiry date of the contract. For currency option contracts involving Rupee where FBIL reference rates are not available and for other currency pairs, the mechanism for arriving at the settlement price shall be decided by the recognized stock exchange in consultation with SEBI. ii. After paragraph 11, the following new paragraph shall be added: 12. Exclusion Nothing contained in these directions shall apply to currency options listed on recognised stock exchanges in the International Financial Services Centres, where International ..... X X X X Extracts X X X X X X X X Extracts X X X X
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