The Securities and Exchange Board of India (SEBI) has issued a circular revising the threshold limits for market participants taking positions in currency derivatives contracts involving the Indian Rupee without establishing an underlying exposure. According to the circular, the update aligns SEBI’s framework with the Reserve Bank of India’s circular on Risk Management and Inter-Bank Dealings.
Under the revised provisions, domestic clients and Foreign Portfolio Investors (FPIs) may take long or short positions in currency derivatives contracts involving the Indian Rupee without establishing an underlying exposure up to a single limit of USD 5 million equivalent of notional value, combined across all recognized stock exchanges. Additionally, FPIs must ensure their short positions across all contracts in FCY-INR pairs do not exceed USD 5 million.
To take long positions exceeding USD 5 million in FCY-INR pairs, FPIs must hold an underlying exposure in Indian debt or equity securities, including mutual fund units. Domestic clients taking positions above USD 5 million must comply with conditions specified under RBI’s regulations. Stock exchanges and clearing corporations are directed to implement these changes, update relevant bye-laws, and inform market participants.
Source
Securities and Exchange Board of India, “Revision of limits relating to requirement of underlying exposure for currency derivatives contracts” dated 5 November 2026. Read the original release (PDF).
Summary of an official release for general information only. Not investment advice. Read the original source before acting on any information.
Official RBI, SEBI, Government and Defence updates as they happen.
Leave a Reply