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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.

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.

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

  1. Download the declaration form (PDF)
  2. Sign the declaration form (e-sign or wet sign)
  3. Create a ticket here to submit the soft copy of the signed form.

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