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TMI BlogRisk Management and Inter-bank Dealings: Permitting Non Resident Indians (NRIs) access to Exchange Traded Currency Derivatives (ETCD) marketX X X X Extracts X X X X X X X X Extracts X X X X ..... tion 47 of FEMA, 1999 (Act 42 of 1999), as amended from time to time and Master Direction on Risk Management and Inter-Bank Dealings dated July 5, 2016, as amended from time to time. 2. Currently NRIs are permitted to hedge their Rupee currency risk through OTC transactions with AD banks. With a view to enable additional hedging products for NRIs to hedge their investments in India, it has been decided to allow them access to the exchange traded currency derivatives market to hedge the currency risk arising out of their investments in India under FEMA, 1999. An announcement to this effect was made in the Monetary Policy Statement on April 5, 2016. 3. NRIs may access the ETCD market as per the following terms and conditions: * NRIs shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R.No. 1005 (E) dated October 25, 2016 a copy of which is given in the Annex I to this circular. These regulations have been issued under clause (h) of sub-section (2) of Section 47 of FEMA, 1999 (42 of 1999). 5. The Notifications No. FMRD.13 / CGM (TRS) dated February 2, 2017 and No. FMRD. 14/CGM (TRS) - 2017 dated February 2, 2017 viz., Currency Futures (Reserve Bank) (Amendment) Directions, 2017 and Exchange Traded Currency Options (Reserve Bank) (Amendment) Directions, 2017 amending the Directions notified vide Notifications No. FED.1 / DG (SG) - 2008 dated August 6, 2008 and Notifications No. FED. 1/ ED (HRK) - 2010 dated July 30, 2010 respectively have been issued. Copies of the Directions are enclosed (Annexes II & III). These Direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons, for the existing Regulation 5B, the following shall be substituted namely: "5B Permission to a person resident outside India to enter into exchange traded currency derivatives A person resident outside India who is exposed to Rupee currency risk arising out of: (i) a permitted current account transaction or (ii) a Rupee denominated asset held by him or a Rupee denominated liability incurred by him, as permitted under FEMA, 1999, may transact currency derivatives contracts on a stock exchange recognised under section 4 of Securities Contracts (Regulations) Act, 1956 to hedge such exposure, subject to such terms and conditions as may be set forth in the directions issued by the Reserve Bank of India from time to time. [F. No. 1/15/E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as permitted under FEMA, 1999, may transact currency futures on a stock exchange recognised under section 4 of Securities Contracts (Regulations) Act, 1956 to hedge such exposure, subject to such terms and conditions as may be set forth in the directions issued by the Reserve Bank of India from time to time. (T Rabi Sankar) Chief General Manager Annex III Exchange Traded Currency Options (Reserve Bank) (Amendment) Directions, 2017 Notification No. FMRD. 14 / CGM (TRS)-2017 dated February 2, 2017 The Reserve Bank of India having considered necessary in public interest and to regulate 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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