RBI/2009-10/290
A.P. (DIR Series) Circular No. 27
January 19, 2010
To
All Authorised Dealer Category - I Banks
Madam / Sir,
Guidelines on trading of Currency Futures
in Recognized Stock Exchanges
Attention of Authorized Dealers Category – I (AD Category – I) banks is invited
to
A.P.(DIR Series) Circular No. 05 dated August 06, 2008, permitting persons
resident in India to participate in the currency futures market in India,
subject to the directions contained in Currency Futures (Reserve Bank)
Directions, 2008 [Notification No. FED.1/ DG (SG)-2008 dated August 6, 2008].
- Currently, persons resident in India are permitted only to trade in US Dollar
(USD) - Indian Rupee (INR) currency futures contracts in recognized stock
exchanges. In order to facilitate direct hedging of currency risk in other
currency pairs as well, it has been decided, as announced in the Second Quarter
Review of Monetary Policy 2009-10 (Para 117), to permit the recognized stock
exchanges to offer currency futures contracts in the currency pairs of Euro-INR,
Japanese Yen (JPY)-INR and Pound Sterling (GBP)-INR, in addition to the USD-INR
contracts, with immediate effect.
- Accordingly, the Notification No.FED. 2 / ED (HRK)-2009 dated January 19,
2010 viz. Currency Futures (Reserve Bank) (Amendment) Directions, 2010, amending
the Directions notified vide Notification No.FED.1/DG(SG)-2008 dated August 6,
2008 has been issued. A copy of the Notification is annexed.
- AD Category-I banks may bring the contents of this circular to the notice of
their constituents and customers, concerned.
- 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,
Salim Gangadharan
Chief General Manager-in-charge
Annex
[A.P.(DIR Series) Circular No.27
dated January 19, 2010]
Currency Futures (Reserve Bank) (Amendment) Directions, 2010
Notification No. FED. 2/ ED (HRK)-2010 dated January 19, 2010
The Reserve Bank of India having considered necessary in the public interest and
having regard to the need for regulating 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
makes the following amendments to the Currency Futures (Reserve Bank)
Directions, 2008 which were notified vide Notification No. FED.1/ DG (SG)-2008
dated August 6, 2008 and published in Part III, Section 4 of the Gazette of
India (Weekly) dated October 11, 2008.
- Short title and commencement of the directions
These Directions may be called the Currency Futures (Reserve Bank) (Amendment)
Directions, 2010 and they shall come into force with effect from January 19,
2010.
- Amendment of the directions
In paragraph 4 of the Currency Futures (Reserve Bank) Directions, 2008,
(i) in clause (a), after the words “Only USD-INR”, the comma and words, “,
Euro-INR, Pound Sterling (GBP)-INR and Japanese Yen (JPY)-INR ” shall be
inserted.
(ii) in clause (b), after the words “USD 1000”, the words, “ for USD-INR
contracts, Euro 1000 for Euro-INR contracts, GBP 1000 for GBP-INR contracts and
JPY 100,000 for JPY-INR contracts." shall be inserted.
(iii) for clause (e) , the following clause shall be substituted, namely :-
"e. The settlement price for USD-INR and Euro-INR contracts shall be the Reserve
Bank’s Reference Rates and for GBP-INR and JPY-INR contracts shall be the
exchange rates published by the Reserve Bank in its press release on the last
trading day.”
(H. R. Khan)
Executive Director
Foot Note:-
The principal regulations were published in the Official Gazette No. 41 dated
October 11 - October 17, 2008 in Part III - Section 4 [Miscellaneous
Notifications including Notifications, Orders, Advertisements and Notices issued
by Statutory Bodies] vide No. FED.1 / DG (SG) – 2008.