Sebi ups limit for currency derivatives trades to $15 mn

Currently, domestic and foreign investors are allowed to take a long (bought) as well as short (sold) position up to $10 mn per exchange

Market regulator, Sebi, has issued a circular revising the positional limits applicable to both domestic and foreign investors for exposure in currency derivatives. After the RBI notified the revision on April 1, Sebi in a circular on Wednesday also revised the limits upwards to $15 million in conjunction with the RBI revision.

Foreign portfolio investors (FPIs) or domestic investors can now invest upto $15 million per exchange without providing an underlying, up from $10 million earlier.

"FPIs (and domestic clients) shall ensure that their short positions at a stock exchange across all contracts in USD-INR pair do not exceed USD 15 million and do not exceed %5 million in EUR-INR, GBP-INR and JPY-INR pairs, all put together," said the Sebi circular.

 

In order to take positions in excess of the given limits, investors will have to furbish an underlying of debt or equity securities, including units of equity/debt mutual funds.

The Sebi circular has asked stock exchanges and clearing corporations to take necessary steps to put in place systems for implementation of the revised regulations.