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February 2010

Guidelines on trading of Currency Futures in Recognized Stock Exchanges

By Pinky Shah
Sonalee Godbole
Gaurang Gandhi
Tarun Ghia
Nimesh Dedhia
Vijay Kewalramani
Chartered Accountants
Reading Time 1 mins
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Part C:
FEMA

Given below are the highlights of certain RBI
circulars, press notes and notifications

38 A. P. (DIR Series) Circular No. 27, dated
January 19, 2010

Guidelines on trading of Currency Futures in
Recognized Stock Exchanges

Notification No. FED. 2 / ED (HRK)–2010, dated
January 19, 2010

Presently, persons resident in India are permitted
only to trade in US Dollar (USD) – Indian Rupee (INR) currency futures contracts
in recognized stock exchanges.

This circular permits persons resident in India,
with immediate effect, 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.

The minimum contract size will be USD 1,000 for USD-INR contracts,
Euro 1,000 for Euro-INR contracts, GBP 1,000 for GBP-INR contracts and JPY
100,000 for JPY-INR contracts. 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.

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