Foreign Exchange Management (Margin for Derivatives Contracts) (First Amendment) Regulations, 2024

Last updated: 08 May 2024

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The Reserve Bank of India has issued the Foreign Exchange Management (Margin for Derivatives Contracts) (First Amendment) Regulations, 2024. These amendments, effective from their publication date, update the principal regulations from 2020. Key changes include modifications to the definition of credit derivative contracts and revised permissions for authorised dealers regarding the posting and collection of margin for various derivative contracts, including those with non-residents and between authorised dealers.

RESERVE BANK OF INDIA (FINANCIAL MARKETS REGULATION DEPARTMENT) (CENTRAL OFFICE) NOTIFICATION Mumbai, the 30th April, 2024 Foreign Exchange Management (Margin for Derivatives Contracts) (First Amendment) Regulations, 2024 No. FEMA.399(1)/2024-RB.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 of India hereby makes the following amendments in the Foreign Exchange Management (Ma

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FAQ :

The new regulations are called the Foreign Exchange Management (Margin for Derivatives Contracts) (First Amendment) Regulations, 2024.

These amendments come into force from the date of their publication in the Official Gazette.

Regulation 2, clause (v), sub-clause (c) regarding Credit Derivative Contracts has been substituted, and Regulation 4 regarding permission for posting and collecting margin has been substituted.

Authorised dealers can now post and collect margin in India and outside India for permitted derivative contracts with non-residents, and receive/pay interest on such margin. They can also post and collect margin outside India for contracts between authorised dealers if one is a foreign bank branch, and for overseas branches/IFSC Banking Units.

Yes, authorised dealers can post and collect margin, in India and outside India, on behalf of their customers for permitted derivative contracts entered into with persons resident outside India, and receive/pay interest on this margin.

Notification No : FEMA.399(1)/2024
Source : https://egazette.gov.in/(S(jdwujwcgwpsx4znjue51zwcd))/ViewPDF.aspx

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