Sebi revises currency derivatives limits for unhedged positions aligning with RBI norms

Mumbai: The Securities and Exchange Board of India (Sebi) has revised the limits for taking unhedged positions in currency derivatives, aligning its framework with the Reserve Bank of India's (RBI) revised norms. The regulator said domestic clients and foreign portfolio investors (FPIs) can take long or short positions in rupee linked currency derivatives without establishing underlying exposure up to a combined limit of $5 million in notional value outstanding at any point.

Read more: Why Nithin Kamath believes NRI investing in India has become easier than ever

Limit will apply across all currency pairs involving the INR, it said on Thursday. However, FPIs would have to ensure that their short positions across all stock exchanges and contracts in foreign currency-rupee pairs do not exceed $5 million. FPIs seeking to take long positions beyond the $5 million threshold would be required to demonstrate exposure in Indian debt or equity securities.


Read more: Equity mutual fund inflows may drop 18% in October as midcap and hybrid funds lose momentum: Nomura