1. RBI norms for primary dealers in exchange-traded currency futures

RBI norms for primary dealers in exchange-traded currency futures

This may diversify participation profile in the currency futures market

By: | Mumbai | Published: March 18, 2016 12:17 AM

The Reserve Bank of India (RBI) on Thursday issued guidelines for permitting primary dealers (PDs) to participate in the exchange traded currency futures on approved stock exchanges subject to adherence to certain risk control measures and without the dilution of existing obligations in the G-sec market.

RBI said this is expected to diversify the participation profile in the currency futures market and would help in further deepening the market.

The RBI pointed out exposure to currency futures will be treated as a non-core activity for PDs and only PDs having a minimum Net Owned Fund of Rs 250 crore or any amount as prescribed for undertaking diversified activity will be allowed to participate in currency futures.

The capital charge for market risk for non-core activities which are expected to consume capital should not be more than 20% of the NOF as per last audited balance sheet, it added.

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