CURRENCY FUTURES (RESERVE BANK) (AMENDMENT) DIRECTIONS, 2017 – AMENDMENT IN PARAGRAPH 3

NOTIFICATION NO.FMRD.13/CGM (TRS)-2017, DATED 2-2-2017

The Reserve Bank of India having considered necessary in public interest and to regulate the financial system of the country to its advantage, in exercise of its powers conferred by section 45W of the Reserve Bank of India Act, 1934 and of all the powers enabling it in this behalf, hereby gives the following directions to all the persons dealing in currency futures.

Short title and commencement of the directions

1. These directions may be called the Currency Futures (Reserve Bank) Amendment Directions 2017 and they shall come into force with effect from February 2, 2017.

2. Amendment to Currency Futures (Reserve Bank) Directions 2008 (as amended videCurrency Futures (Reserve Bank) (Amendment) Directions, 2014 as per Notification No. FED. 1/ED (GP)-2014 dated June 10, 2014 and Currency Futures (Reserve Bank) (Amendment) directions, 2015 as per Notification No. FMRD. 1/ED(CS)-2015 dated December 10, 2015).

In para. 3, for sub-para. (iii), the following shall be substituted:

“(iii) Persons resident outside India, as defined in section 2(w) of Foreign Exchange Management Act, 1999 (Act 42 of 1999), who are exposed to Rupee currency risk arising out of:

(I)		a permitted current account transaction or
(II)		a Rupee denominated asset held by him or a Rupee denominated liability incurred by him, as permitted under FEMA, 1999,

may transact currency futures on a stock exchange recognised under section 4 of Securities Contracts (Regulations) Act, 1956 to hedge such exposure, subject to such terms and conditions as may be set forth in the directions issued by the Reserve Bank of India from time to time.