Sebi tweaks norms on currency F&O contracts

New Delhi: Sebi on Tuesday tweaked the client level position limits for trading in cross-currency futures and options (F&O) contracts.

Position limit refers to the highest number of options or futures contracts an investor is allowed to hold on one underlying security.

Based on feedback received from stock exchanges and clearing corporations and upon a review of the same, it has been decided to revise the client level position limits, per stock exchange, Sebi said in a circular.

Gross open positions of the client across all contracts in the respective currency pairs will not exceed the limits set up by the regulator. For USD-INR, Sebi said that gross open position across all contracts will not exceed 6 per cent of the total Open Interest (OI) or $20 million, whichever is higher.

Earlier, this was $10 million. In EUR-INR case, the gross open position across all contracts will not exceed 6 per cent of the total open interest or 10 million euros, whichever is higher.

The limit was earlier fixed at 5 million euros. With regard to GBP-INR, gross open position across all contracts will not exceed 6 per cent of the total open interest or 10 million pounds, whichever is higher.

Earlier, limit was set at 5 million pounds. For JPY-INR, Sebi said gross open position across all contracts will not exceed 6 per cent of the total open interest or JPY 400 million Japanese yen, whichever is higher. Previously, the limit was 200 million Japanese yen.

"The revised position limits shall also apply to Non-Resident Indians (NRIs) and Category II Foreign Portfolio Investors (FPIs) that are individuals, family offices, and corporates," Sebi said.