Trading by banks in currency derivative to be as per RBI norms

Tags: News
Market regulator Sebi today said any trading activity of banks in the currency derivative space will be guided by Reserve Bank of India (RBI) guidelines.

The Securities and Exchange Board of India (Sebi), in a circular, said that "banks, whether participating in the currency derivatives segment as clients or as stock brokers, shall be guided" by the provisions of RBI.

Besides, the regulator said that domestic institutional investors can take position in foreign currency up to USD 100 million or equivalent per exchange in the currency derivative segment.

"Gross open position across all contracts shall not exceed 15 per cent of the total open interest or USD 100 million, whichever is higher," Sebi said.

However, Sebi said that this position limit is subject to domestic institutional investors being permitted by their respective sectoral regulators to participate in the currency derivatives segment.

Last month, Sebi had allowed foreign portfolio investors (FPI) to participate in the domestic exchange traded currency derivatives in order to enhance the depth of the foreign exchange market.

The central bank had in July last year imposed curbs such as doubling of margin requirement and a ceiling on position limits on exchange-traded currency derivatives.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • The big challenge before India now is to figure out the real China

    Sino-Indian relations come under a rather special category, as far as ties between two neighbouring countries go.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Varun Dutt

Risks and effects of climate change

Research has shown that several people are aware of climate ...

Parvez Imam

Why we all have blood on our hands

What does the Jammu and Kashmir flood make us think? ...

Dharmendra Khandal

The peculiar possibilities of animal poop

You can tell a lot about an animal by its ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture