| Date: |
05-09-2000
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| Notification No: |
RBI A P D (Series)Circular No 11/2000
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| Issuing Authority: |
RBI
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| Type: |
A.P.D.(Series) Circulars
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| File No: |
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| Subject: |
Commodity Hedging
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Commodity Hedging
Attention
of authorised dealers is invited to the Notification No. FEMA 25/RB- 2000 dated
3rd May, 2000 issued by Reserve Bank under the Foreign Exchange Management Act,
1999, making "Foreign Exchange Management (Foreign exchange derivative
contracts) Regulations, 2000". In terms of the Regulation 6 of the
Notification, Reserve Bank considers applications, from persons resident in
India, for granting permission to enter into contracts for hedging the price
risk in a commodity excluding oil and petroleum products. It has now been
decided that importers/ exporters of crude oil and petroleum products may also
be permitted to hedge their exposure to price risk.
2.
Procedure for making application to Reserve Bank seeking its approval for
entering into contracts for hedging of commodity price risk as specified in
Schedule III to the Notification, referred to above, shall apply
mutatis-mutandis to crude oil and petroleum products.
3.
Necessary amendment to the Notification is being issued separately.
4.
Authorised dealers may bring the contents of this circular to the notice
of their constituents concerned.
5.
The directions contained in this circular have been issued under Section
10(4) and Section 11(1) of the Foreign Exchange Management Act 1999 (42 of
1999). Any contravention or non-observance of these directions is subject to the
penalties prescribed under the Act.
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