RBI/2010-11/538
A. P. (DIR Series) Circular No. 67
May 20, 2011
To,
All Category - I Authorised Dealer Banks
Madam / Sir,
Forward cover for Foreign Institutional Investors –
Rebooking of cancelled contracts
Attention of Authorised Dealer Category - I (AD Category - I) banks is invited
to Regulation 5 of
Notification No.FEMA.25/RB-2000 dated May 3, 2000, as amended
from time to time regarding the permission to a person resident outside India to
enter into a foreign exchange derivative contract, read with
A. P. (DIR Series)
Circular No.32 dated December 28, 2010 in the matter.
- Currently, in terms of Section C (i) (d) of the
A. P. (DIR Series) Circular
No. 32 dated December 28, 2010, Foreign Institutional Investors (FIIs) are
permitted to cancel and rebook up to two percent of the market value of the
portfolio as at the beginning of the financial year. On a review, it has been
decided to enhance the existing limit of two per cent as above to ten per cent
with immediate effect. Other operational guidelines as also terms and conditions
of the circular shall remain unchanged.
- AD Category – I banks may bring the contents of this circular to the notice
of their constituents and customers concerned.
- The directions contained in this circular have been issued under sections
10(4) and 11(1) of the Foreign Exchange Management Act 1999 (42 of 1999) and are
without prejudice to permissions / approvals, if any, required under any other
law.
Yours faithfully,
(Meena Hemchandra)
Chief General Manager-In-Charge