Position Limits for Currency Derivatives Contracts

Position Limits for Currency Derivatives Contracts

CIRCULAR

SEBI/HO/MRD2_DCAP/P/CIR/2021/626

September 07, 2021

All Recognized Stock Exchanges All Recognized Clearing Corporations All Depositories All Designated Depository Participants (DDPs) through Depositories All Custodians All Foreign Portfolio Investors (FPI) through their DDPs Madam/Sir, Subject – Position Limits for Currency Derivatives Contracts

1. The position limits in approved currency pairs were specified by SEBI in circular CIR/MRD/DP/20/2014 dated June 20, 2014. Following comments from Stock Exchanges/ Clearing Corporations and a study of the information, it was agreed to alter the client level position limits per stock exchange as follows:

Currency Pair	Position limits
USD-INR	Gross open position across all contracts shall not exceed 6% of the total open interest or USD 20 million, whichever is higher.
EUR-INR	Gross open position across all contracts shall not exceed 6% of the total open interest or EUR 10 million, whichever is higher.
GBP-INR	Gross open position across all contracts shall not exceed 6% of the total open interest or GBP 10 million, whichever is higher.
JPY-INR	Gross open position across all contracts shall not exceed 6% of the total open interest or JPY 400 million, whichever is higher.

2. Non-Resident Indians (NRIs) and Category II FPIs (individuals, family offices, and corporates) will also be subject to the revised position limits. SEBI circulars SEBI/HO/MRD/DP/CIR/P/2017/63, dated June 28, 2017, and CIR/MRD/DP/20/2014, dated June 20, 2014, read with SEBI circular IMD/FPI&C/CIR/P/2019/124, dated November 5, 2019, shall be modified to the extent specified above. 3. The position limits for Category I FPIs and Category II FPIs (other than individuals, family offices, and corporates) shall remain unchanged as specified in SEBI circular CIR/MRD/DP/20/2014 dated June 20, 2014, as amended by SEBI circular IMD/FPI&C/CIR/P/2019/124 dated November 5, 2019. All other conditions specified in previous SEBI circulars will remain unchanged. 4. To reduce risk and ensure orderly trading, stock exchanges/clearing corporations may impose additional safeguards/conditions as they see fit. 5. This circular's provisions will take effect immediately. 6. This circular is being issued in accordance with the powers conferred by Section 11(1) of the Securities and Exchange Board of India Act, 1992, to protect the interests of investors in securities and to promote the development and regulation of the securities market. 7.This circular can be found on the SEBI website at www.sebi.gov.in in the category "Circulars." Yours faithfully, Sudeep Mishra General Manager Market Regulation Department E-mail: [email protected]