FEMA (Foreign Exchange Derivative Contracts) Amend. Reg, 09

Foreign Exchange Management (Foreign Exchange Derivative Contracts) (Amendment) Regulations, 2009 - Insertion of regulation 6A

Notification No. G.S.R. 440(E) [NO. FEMA 191/RB-2009

Dated 20-5-2009

In exercise of the powers conferred by clause (h) of sub-section (2) of section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank hereby makes the following amendments in the Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000, (Notification No. FEMA 25/RB-2000, dated May 3, 2000), namely :—

1. Short title and commencement.—(i) These Regulations may be called the Foreign Exchange Management (Foreign Exchange Derivative Contracts) (Amendment) Regulations, 2009.

(ii) They shall be deemed to have come into effect from the 4th day of February, 2009.

2. Amendment of Regulation.—In the Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000, (Notification No. FEMA 25/ RB-2000, dated May 3, 2000), after Regulation 6, the following new regulation shall be inserted namely :—

"Freight hedge

6A. (i) Reserve Bank may, on an application made in accordance with such procedure as may be directed by Reserve Bank, permit a person resident in India, subject to such terms and conditions as may be considered necessary, to enter into a freight derivative contract in an exchange or a market out-side India to hedge the freight risk such person is exposed to.

(ii) Notwithstanding anything contained in sub-regulation (i) an authorised dealer in India specially authorised by the Reserve Bank under sub-regulation (ii) of Regulation 6 may premit an oil refining company or a shipping company, resident in India, to enter into freight derivative contracts in an exchange or market outside India, to hedge the freight risk which the company is exposed to, subject to such terms and conditions as may be stipulated by the Reserve Bank from time to time :

Provided that such authorised dealer category-I bank shall exercise the authority subject to directions and guidelines issued to them by the Reserve Bank in that behalf."

[F. No. 1/23/EM/2000-Vol. IV]