RBI Circular on Currency Derivatives

As per the circular, effective from April 5, proprietary traders and retail investors will be required to demonstrate contracted or prospective currency exposure to participate in the currency derivatives segments provided by the exchanges.

Here is an important update for all your Currency Positions

• From April 02, 2024, onwards all currency pairs will be in square off mode.
• All existing open positions should be squared off by Thursday, April 04, 2024.
• Now only clients having valid underlying exposure proof are allowed to trade in the currency segment.

What is admissible according to the circular?

• The user is allowed to take positions (long or short), without having to establish existence of underlying exposure, up to a single limit of $100 million equivalent across all currency pairs involving INR, put together, and combined across all recognized stock exchanges (NSE, BSE and MSEI offering contracts).
• However, the user must ensure a valid underlying contracted exposure which has not been hedged using any other derivative contract and should be able to establish the same, if required.

Circular:

RBI Circular

BSE Circular