MANU/SDER/0010/2008

Ministry : Securities and Exchange Board of India

Department / Board : Derivatives and New Products Department

Circular No : SEBI/DNPD/Cir- 38 /2008

Date : 06.08.2008

To,

Recognized Stock Exchanges 
and their Clearing Corporations / 
Clearing Houses, Clearing Members and Trading Members

Exchange Traded Currency Derivatives

A RBI-SEBI Standing Technical Committee ("Committee") was constituted to evolve norms and oversee implementation of Exchange Traded Currency and Interest Rate Derivatives. To begin with, the Committee has looked at Exchange Traded Currency Derivatives and submitted a Report on Exchange Traded Currency Futures ("Report"). The Report, which was submitted on May 29, 2008, is also available on the SEBI website www.sebi.gov.in.

The Report lays down the framework for the launch of Exchange Traded Currency Futures in terms of the eligibility norms for existing and new Exchanges and their Clearing Corporations/Houses, eligibility criteria for members of such Exchanges/Clearing Corporations/Houses, product design, risk management measures, surveillance mechanism and other related issues.

I. EXCHANGE TRADED CURRENCY DERIVATIVES

For trading in Exchange Traded Currency Derivatives, Recognized Stock Exchanges and their Clearing Corporations / Clearing Houses, Clearing Members and Trading Members have to comply with the following:

1. Exchange: A Recognized Stock Exchange fulfilling the conditions mentioned under paras 5.1 and 5.2 of the Report may apply to SEBI for grant of approval for starting trading in Currency Derivatives. The application shall be accompanied by the details pertaining to the derivatives product proposed to be introduced (mentioned under para 7.2 of the Report), the proposed Bye-laws of the Exchange/ Clearing Corporation / Clearing House and the model documents for Currency Derivatives Segment (in accordance with para 7.1 of Report).