On 15 March, SEBI revised exposure limit on currency derivatives.
- RBI revised the limits, beyond which market participants would be required to
establish underlying exposure in the currency derivatives segment.
- Allow domestic clients/ FPIs may take long or short positions without underlying.
- Up to a single limit of $100m equivalent, across all currency pairs involving INR.
- FPIs on short positions at all stock exchanges, contracts in FCY-INR under $100m.
- In the event a FPI breaches the short position limit, stock exchanges shall restrict
the FPI from increasing its existing short positions or creating new short positions.
- When take long position in excess of $100m in all contracts in FCY-INR pairs, FPIs
it will be required to have underlying exposure in Indian debt or equity securities.
- Domestic clients may take positions in excess of $100m in in all contracts in FCY-
INR pairs, subject to the conditions as were specified in the previous RBI circular.
- Limits shall be monitored by stock exchanges/clearing corporations and breaches,
reported to market surveillance team of Financial Markets Regulation Department.