Hedging of exchange rate risk by Foreign Portfolio Investors (FPIs) under Voluntary Retention Route

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..... Attention of Authorised 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 Master Direction - Risk Management and Inter-Bank Dealings dated July 5, 2016, as amended from time to time. .....

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..... 4. The directions contained in this circular are issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/ approvals, if any, required under any other law. Yours faithfully, (T Rabi Sankar) Chief General Manager Annex Hedging of exchange rate risk by Foreign Portfolio Investors ( .....

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..... ith any other authorised dealer or on the exchange. d. In cases where the value of the exposure falls below the notional of the derivative, the derivative should be suitably adjusted unless such divergence has occurred on account of change in market value of the exposure, in which case the FPI may, at its discretion, continue with the derivative contract till its original maturity. ii. Autho .....

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