ADs Can Post and Collect Margins in India/Outside India for Derivative Contracts Entered With Non-Residents
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- Last Updated on 8 May, 2024
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Notification No. FEMA 399(1)/2024-RB; Dated: 30.04.2024
The RBI has notified the Foreign Exchange Management (Margin for Derivatives Contracts) (First Amendment) Regulations, 2024. An amendment has been made to Regulation 4 of the existing regulations. These shall come into force with effect from the date of their publication in the Official Gazette.
As per the amended norms, authorised dealers (ADs) may post and collect margin in India and outside India for permitted derivative contracts entered into with a person resident outside India (PROI) and receive and pay interest on such margin. Further, ADs may post and collect margins outside India for permitted derivative contracts entered into with other authorised dealers subject to certain conditions. The condition is that at least one of the authorised dealers is a branch of a foreign bank and receives and pays interest on such margin.
Also, authorised dealers may post and collect margins in India and outside India for derivative transactions of their overseas branches and International Financial Services Centre Banking Units and receive and pay interest on such margin. However, posting and collection of such margin and receipt and payment of interest on the margin may be undertaken by the Authorised Dealer or by its overseas branches or its overseas head office subject to terms and conditions specified by the RBI.
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