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Thursday, August 7, 2008

Exchange Traded Currency Futures (ETCF) in Recognised Stock Exchanges for Person Resident in India (PRII)

Yes, now Person Resident In India (PRII) can trade in CURRENCY FUTURES through Recognised Stock Exchanges from the Country. Yes, yet another product in the line of Over The Counter (OTC)

Futures - a STANDARDISED Contract(coz Stock Exchange will act as a Counter Party, if a party to the contract defaults) traded on a Futures Exchange to buy or sell a certain Underlying Instrument @ a certain Date in the Future @ a Specified Price.

Currency Futures - Futures Contract of a Specified Currency.

Exchange Traded Currency Futures (ETCF) Contract - Such Currency Futures Contract are LISTED in the Stock Exchange, thereby confering a BENEFIT on them to be traded in Open Market. Thus facilitating efficient price discovery, enabling better counterparty credit risk management, having wider participation, trading of standardized product, reduce transaction costs, et al.

Persons Resident In India (PRII) are permitted to participate in the currency futures market in India subject to directions contained in the Currency Futures (Reserve Bank) Directions, 2008 [Notification No.FED.1/DG(SG)-2008 dated August 6, 2008] (Directions) issued by the Reserve Bank of India, a copy of which is annexed (Annex-I).

Do read the full RBI Notification in RBI/2008-09/122 A.P. (DIR Series) Circular No. 05 dated 6th August 2008

Also read the relevant SEBI Circular


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