The Reserve Bank of India (RBI) issued a circular on 26 February permitting persons resident in India and foreign portfolio investors (FPIs), under the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014, to take long and short positions without having to establish the existence of underlying exposure. The RBI set a single limit of a US$100 million equivalent across all currency pairs involving Indian rupees, put together and combined across all exchanges.
Under the former framework, persons resident in India and FPIs were allowed to take a long or short position in rupees-US dollars up to US$15 million per exchange without having to establish existence of underlying exposure, and take long or short positions in rupees-euros, rupees-British pounds and rupees-Japanese yen pairs, all put together up to US$5 million equivalent per exchange without having to establish existence of an underlying exposure.
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The business law digest is compiled by Nishith Desai Associates (NDA). NDA is a research-based international law firm with offices in Mumbai, New Delhi, Bengaluru, Singapore, Silicon Valley, Munich and New York. It specializes in strategic legal, regulatory and tax advice coupled with industry expertise in an integrated manner.
