Securities and Exchange Board of India

09.03.2016

Capital Market

Exchange Traded Cross Currency Derivatives contracts on various currency pairs introduced

MANU/SDER/0005/2016

The Securities and Exchange Board of India permitted stock exchanges to introduce cross-currency futures and options contracts on EUR-USD, GBP-USD and USD-JPY. Trading in cross-currency derivatives contracts is allowed between 9.00 am and 7.30 pm. Additionally, stock exchanges will have to implement mechanisms of Dynamic Price Bands in the currency derivatives segment to prevent acceptance of orders beyond the price limits set. Product Design and Risk Management framework for the contracts is annexed with the notification.

Previously, the Reserve Bank of India had permitted stock exchanges offering cross-currency futures and option contractions for the same currency pairs and also allowed offering of currency option contracts in EUR-INR, GBP-INR and JPY-INR, in addition to the existing USD-INR currency pair.

Relevant

Guidelines on trading of Currency Futures and Exchange Traded Currency Options MANU/APDR/0094/2015
Revision of limits relating to requirement of underlying exposure for currency derivatives contracts MANU/SDER/0002/2015
Exchange Traded Currency Derivatives MANU/SDER/0010/2008

Tags : Exchange traded cross currency derivatives contract

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