Regulation 2 - Definitions - Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000

2. Definitions :- In these Regulations, unless the context requires otherwise, - (i) Act means the Foreign Exchange Management Act, 1999 (42 of 1999) ; (ii) 3 [ authorised dealer means a person authorised as such by Reserve Bank under sub-section (1) of section 10 of the Act; ] (iii) 6 [ **** ] (iv) 6 [ **** ] (v) 4 [ Foreign exchange derivative contract means a financial contract which derives its value from the change in the exchange rate of two currencies at least one of which is not Indian Rupee or which derives its value from the change in the interest rate of a foreign currency and which is for settlement at a future date, i.e. any date later than the spot settlement date, provided that contracts involving currencies of Nepal and Bhutan shall not qualify under this definition. ] (va) 6 [ **** ] (vi) 6 [ **** ] (vii) Schedule means a schedule annexed to these Regulations; (viii) 6 [ **** ] (ix) 6 [ **** ] (x) the words and expressions used but not defined in these Regulations shall have the same meanings respectively assigned to them in the Act. (xi) 6 [ **** ] 5 [ (xii) Contracted exposure refers to currency risk arising on account of current and capital account transactions permissible under the Act or any rules or regulations made thereunder, that have been entered into. (xiii) Anticipated exposure refers to currency risk arising on account of current and capital account transactions permissible under the Act or any rules or regulations made thereunder, that are proposed to be entered into in future. (xiv) Currency risk means the potential for loss on account of movement in exchange rates of Rupee against a foreign currency or on account of movement in exchange rates of one foreign currency against another or on account of movement of interest rate applicable to a foreign currency. (xv) Hedging means the activity of undertaking a foreign exchange derivative transaction to manage currency risk. (xvi) Exchange traded currency derivatives means a standardised foreign exchange derivative contract traded on a recognized stock exchange to buy or sell one currency against another on a specified future date, at a price specified on the date of contract.] ************** Notes : 1. Has been inserted vide Notification No. 177/RB-2008 dated 1/8/2008 2. Inserted vide NOTIFICATION No. FEMA. 260/2013-RB dated 18/02/2013 w.e.f. 16/07/2012. 3. Substituted vide Notification No. FEMA.398/RB-2020 dated 18-02-2020 before it was read as (ii) authorised dealer means a person authorised as authorised dealer under sub-section (1) of section 10 of the Act; 4. Substituted vide Notification No. FEMA.398/RB-2020 dated 18-02-2020 before it was read as (v) Foreign exchange derivative contract means a financial transaction or an arrangement in whatever form and by whatever name called, whose value is derived from price movement in one or more underlying assets, and includes, (a) a transaction which involves at least one foreign currency other than currency of Nepal or Bhutan, or (b) a transaction which involves at least one interest rate applicable to a foreign currency not being a currency of Nepal or Bhutan , or (c) a forward contract, but does not include foreign exchange transaction for Cash or Tom or Spot deliveries; 5. Inserted vide Notification No. FEMA.398/RB-2020 dated 18-02-2020 6. Omitted vide Notification No. FEMA.398/RB-2020 dated 18-02-2020 before it was read as (iii) Cash delivery means delivery of foreign exchange on the day of transaction ; (iv) Forward contract means a transaction involving delivery, other than Cash or Tom or Spot delivery, of foreign exchange; 1 [(va) Currency Futures means a standardised foreign exchange derivative contract traded on a recognized stock exchange to buy or sell one currency against another on a specified future date, at a price specified on the date of contract, but does not include a forward contract.] (vi) Registered Foreign Institutional Investor (FII) means a foreign institutional investor registered with Securities and Exchange board of India; (viii) Spot delivery means delivery of foreign exchange on the second working day after the day of transaction; (ix) Tom delivery means delivery of foreign exchange on a working day next to the day of transaction; 2 [(xi) Qualified Foreign Investor (QFI) means a person resident outside India as defined in Regulation 2 of FEMA 20/RB-2000 dated May 3, 2000 . ]