RBI Allows Euro, GBP and Yen Trading
[RBI
Circular No. 27 dated 19th January 2010]
Sub: Guidelines
on trading of Currency Futures in Recognized Stock Exchanges
Attention of Authorized Dealers Category – I (AD
Category – I) banks is invited to A.P.(DIR Series) Circular No. 05 dated August
06, 2008, permitting persons resident in India to participate in the currency
futures market in India, subject to the directions contained in Currency
Futures (Reserve Bank) Directions, 2008 [Notification No.
FED.1/ DG (SG)-2008 dated August 6, 2008].
2. Currently,
persons resident in India are permitted only to trade in US Dollar (USD) -
Indian Rupee (INR) currency futures contracts in recognized stock exchanges. In
order to facilitate direct hedging of currency risk in other currency pairs as
well, it has been decided, as announced in the Second Quarter Review of
Monetary Policy 2009-10 (Para 117), to permit the recognized stock exchanges to
offer currency futures contracts in the currency pairs of Euro-INR, Japanese
Yen (JPY)-INR and Pound Sterling (GBP)-INR, in addition to the USD-INR
contracts, with immediate effect.
3. Accordingly,
the Notification No.FED. 2 / ED (HRK)-2009 dated January 19, 2010 viz. Currency
Futures (Reserve Bank) (Amendment) Directions, 2010, amending the Directions
notified vide Notification No.FED.1/DG(SG)-2008 dated August 6, 2008 has been
issued. A copy of the Notification is annexed.
4. AD
Category-I banks may bring the contents of this circular to the notice of their
constituents and customers, concerned.
5. This
circular has been issued under Sections 10(4) and 11(1) of the Foreign Exchange
Management Act, 1999 (42 of 1999) and is without prejudice to permissions /
approvals, if any, required under any other law.
Sub: Currency
Futures (Reserve Bank) (Amendment) Directions, 2010 Notification No. FED. 2/ ED
(HRK)-2010 dated January 19, 2010
The Reserve Bank of India having considered
necessary in the public interest and having regard to the need for regulating
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 all the
powers enabling it in this behalf, hereby makes the following amendments to the
Currency Futures (Reserve Bank) Directions, 2008 which
were notified vide Notification No. FED.1/ DG (SG)-2008 dated August
6, 2008 and published in Part III, Section 4 of the Gazette of India (Weekly)
dated October 11, 2008.
1. Short
title and commencement of the directions
These Directions may be called the Currency Futures
(Reserve Bank) (Amendment) Directions, 2010 and they shall come into force with
effect from January 19, 2010.
2. Amendment
of the directions
In paragraph 4 of the Currency Futures (Reserve
Bank) Directions, 2008,
(i) in
clause (a), after the words “Only USD-INR”, the comma and words, “, Euro-INR,
Pound Sterling (GBP)-INR and Japanese Yen (JPY)-INR ” shall be
inserted.
(ii) in
clause (b), after the words “USD 1000”, the words, “ for USD-INR
contracts, Euro 1000 for Euro-INR contracts, GBP 1000 for GBP-INR contracts and
JPY 100,000 for JPY-INR contracts." shall be inserted.
(iii) for
clause (e) , the following clause shall be substituted, namely :-
"e. The settlement price for USD-INR and
Euro-INR contracts shall be the Reserve Bank’s Reference Rates and for GBP-INR
and JPY-INR contracts shall be the exchange rates published by the Reserve Bank
in its press release on the last trading day.”