| Date: |
31-03-2015
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| Notification No: |
RBI/2014-15/527 A.P.(DIR Series) Circular No. 91
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| Issuing Authority: |
RBI
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| Type: |
A.P.D.(Series) Circulars
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| File No: |
RBI/2014-15/527 |
| Subject: |
Risk Management and Inter-bank Dealings: Revised Position Limits for Foreign Portfolio Investors (FPIs) in the Exchange Traded Currency Derivatives (ETCD) market
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RBI/2014-15/527
A.P.(DIR Series) Circular No. 91
Mar 31, 2015
To All Category - I Authorised Dealer banks
Madam / Sir,
Risk Management and Inter-bank Dealings: Revised Position Limits for
Foreign Portfolio Investors (FPIs) in the Exchange Traded Currency Derivatives
(ETCD) market
Attention of Authorized Dealers Category – I (AD Category – I) banks is invited
to the Foreign Exchange Management (Foreign Exchange Derivative Contracts)
Regulations, 2000 dated May 3, 2000 (Notification No. FEMA. 25/RB-2000 dated May
3, 2000), as amended from time to time and
A.P. (DIR Series) Circular 148 dated
June 20, 2014 relating to participation of Foreign Portfolio Investors (FPIs) in
the ETCD market.
Increase in limits without establishing underlying exposure
- Presently, FPIs can take position – both long (bought) as well as
short(sold) – in foreign currency up to USD 10 million or equivalent per
exchange . As a measure of further liberalisation, it has now been decided
to increase the limit (long as well as short) for FPIs in USD-INR pair upto
USD 15 million per exchange. In addition, FPIs shall be allowed to take long
(bought) as well as short (sold) positions in EUR-INR, GBP-INR and JPY-INR
pairs, all put together, upto USD 5 million equivalent per exchange. These
limits shall be monitored by the exchanges and breaches, if any, may be
reported. For the convenience of monitoring, exchanges may prescribe fixed
limits for the contracts in currencies other than USD such that these limits
are within the equivalent of USD 5 million.
- All other operational guidelines, terms and conditions shall remain
unchanged.
- 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,
(R Subramanian)
Chief General Manager
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