SEBI allows NRIs to hedge currency risk

New Delhi, June 28 

Markets regulator SEBI today allowed NRIs to access the exchange traded currency derivatives (ETCD) market to hedge currency risk arising out of their investments in India, a move aimed at providing them additional hedging option.

At present, NRIs (non-resident Indians) are permitted to hedge their rupee currency risk through over-the-counter (OTC) transactions with banks. The SEBI said NRIs are now permitted to trade in the currency derivatives segment of stock exchanges, subject to certain terms and conditions.

These included NRIs would have to designate bank for the purpose of monitoring and reporting their combined positions in the OTC and ETCD segments. The SEBI has asked stock exchanges to take steps to put in place necessary systems. — PTI 

Can trade in derivatives  

• At present, NRIs are permitted to hedge their rupee currency risk through over-the-counter transactions with banks
• They are now permitted to trade in the currency derivatives segment of stock exchanges, subject to certain terms and conditions
• NRIs would have to designate bank for the purpose of monitoring and reporting their combined positions in the OTC and ETCD segments