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How to submit the currency declaration form to trade in the currency segment?

RBI has mandated traders to compulsorily have an underlying contracted exposure to foreign currency if they want to trade in the currency derivatives segment. The corresponding exchange circulars enforcing the RBI’s instructions are linked below:

If a trader has an exposure greater than $100 million (i.e. notional contract value), they will be required to appoint a custodian participant or an authorised dealer. However, for traders with a smaller exposure, a declaration that they are trading currencies to hedge their contracted exposure will suffice.

If the declaration is not provided, traders will not be allowed to take any fresh positions in the currency segment from 4th April, but they will be able to exit their existing positions. Traders are requested to monitor their existing open positions since the liquidity may dry up leading up to Friday, 5th April 2024, when the RBI circular comes into effect.

At Zerodha, when clients activate their currency segment on Console, they will have to submit the RBI declaration. The mobile number must be linked with Aadhaar to activate the segment online. To activate the currency segment, follow these steps:

  1. Login to console.zerodha.com.
  2. Click on Account.
  3. Click on Segment.
  4. Click on NSE - Currency Exchange and/or BSE - Currency Exchange.
  5. Click on Continue.
  6. Select the income range.
  7. Click on Choose file and upload an income proof 1 or use the holdings statement as income proof.
  8. Accept the terms and conditions.
  9. Choose to receive the OTP on email or mobile and click on Continue.
  10. Enter the OTP and click on Verify.
  11. Click on Proceed then on Sign now.
  12. Enter the Aadhaar number and click on Send OTP.
  13. Enter the OTP and click on Verify & sign.


If the mobile number is not linked to Aadhaar, clients can follow these steps:

  1. Print and sign the RBI declaration form (PDF).
  2. Courier it along with an income proof 1 to:
  3. Zerodha,
    153/154, 4th Cross, J.P Nagar 4th Phase,
    Opp. Clarence Public School,
    Bengaluru - 560078

Note

1 Any of the below documents will suffice as income proof:

  • Bank statement for the last 6 months with an average balance of more than ₹10,000. (Statement must be in the name of the Zerodha account holder.)
  • The latest salary slip with gross monthly income exceeding ₹15,000.
  • ITR acknowledgement with gross annual income exceeding ₹1,20,000.
  • Form 16 with gross annual income exceeding ₹1,20,000.
  • Certificate of net worth more than ₹10,00,000.
  • Statement of demat holdings with current holdings value exceeding ₹10,000.

RBI defines contracted exposure in the following way:

‘Contracted exposure’ means currency risk arising on account of current or capital account transactions permissible under the FEMA, 1999 or any rules or regulations made thereunder, that have been entered into.

To learn more, visit tradingqna.com/t/query-on-currency-derivatives-trading.

Did you know?

  • Clients must enable the segment on Console by 8 P.M to trade in currencies the next trading day. If the declaration is being couriered, it can take up to 48 working hours for the segment to be enabled.
  • The equity segment must be active to enable the currency segment.
  • Clients cannot enable currency and commodity segments at the same time. Separate requests must be placed. To learn how to activate commodity, see How to open a commodity account?

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