Regulation 6 - Commodity Hedge - Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000

1 6. Commodity Hedge :- 2 (i) Reserve Bank may, on an application made in accordance with the procedure specified in Schedule III permit, subject to such terms and conditions as it may consider necessary, a person resident in India to enter into a contract in a commodity exchange or market outside India to hedge the price risk in a commodity. (ii) Notwithstanding anything contained in sub-regulation (i), an authorized dealer bank 5 [***] may permit a company, resident in India 4 [***], to enter into contracts in a commodity exchange or market outside India, to hedge the price risk in a commodity 3 (***) subject to such terms and conditions as may be stipulated by the Reserve Bank from time to time. 6 [***] 7 [***] 8 [(iii)] Notwithstanding anything contained in this regulation a unit in the Special Economic Zone (SEZ) may enter into contracts in a commodity exchange or market outside India to hedge the price risk of the commodity of export/import, subject to the condition that such contract is entered into on a 'stand-alone' basis. Explanation : - The term 'stand-alone' means that the unit in the SEZ is completely isolated from financial contracts with its parent or subsidiary in the mainland or within the SEZ(s) as far as its import/export transactions are concerned. ************************** Notes : 1. Has been substituted vide Notification No. 148/RB-2006 dated 16/3/2006 , before it was read as, Reserve Bank may, on an application made in accordance with the procedure specified in Schedule III, permit subject to such terms and conditions as it may consider necessary, a person resident in India to enter into a contract in a commodity exchange or market outside India to hedge price risk in a commodity . 2 Provided that a unit in the Special Economic Zone (SEZ) may, without prior approval of the Reserve Bank, enter into a contract in a commodity exchange or market outside India to hedge the price risk in the commodity on export/import, subject to the condition that such contract is entered into on a 'stand-alone' basis. 2. Has been added by Notification No. 066/2002 dated 27/7/2002 3. The words imported/exported by it has been Omitted vide Notification No. 159/2007 dated 17/9/2007 (w.e.f. 31st day of May, 2007) 4. Omitted vide notification no. 201/2009 RB dated 5-11-2009 w.e.f. 3.6.2008, before it was read as, and listed on a recognised stock exchange 5. Omitted vide NOTIFICATION No. FEMA. 260/2013-RB dated 18/02/2013 w.e.f. from January 17, 2012, before it was read as, specially authorized in that behalf by the Reserve Bank 6. Omitted vide NOTIFICATION No. FEMA. 260/2013-RB dated 18/02/2013 w.e.f. from January 17, 2012, before it was read as, Provided that such authorized dealer bank shall exercise such authority subject to the directions and guidelines issued to them by the Reserve Bank in that behalf .l 7. Omitted vide NOTIFICATION No. FEMA. 260/2013-RB dated 18/02/2013 w.e.f. from January 17, 2012, before it was read as, An authorised dealer bank may apply to the Reserve Bank of India, Foreign Exchange Department for grant of authority to grant permission under sub-regulation (ii) to its customers. 8. Renumbered as (iii) vide NOTIFICATION No. FEMA. 260/2013-RB dated 18/02/2013 w.e.f. from January 17, 2012,