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Date: 06-May-2024 Category: Extra Ordinary State: Union Government Country: India

In exercise of the powers conferred by clause h of sub section 2 of Section 47 of the Foreign Exchange Management Act

Issued by Reserve Bank of India · Not Applicable

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Executive Summary & Key Takeaways

What it means

  • The notification introduces the Foreign Exchange Management (Margin for Derivatives Contracts) (First Amendment) Regulations, 2024. It amends the Foreign Exchange Management (Margin for Derivatives Contracts) Regulations, 2020, to update rules regarding margin posting and collection for derivative contracts.

Key Changes

  • The regulations are called the Foreign Exchange Management (Margin for Derivatives Contracts) (First Amendment) Regulations, 2024.
  • The regulations came into force on the date of their publication in the Official Gazette: May 6, 2024.
  • Regulation 2 of the Principal Regulation is amended to replace sub-clause (c) of clause (v) regarding Credit Derivative Contracts, aligning it with the Master Direction – Reserve Bank of India (Credit Derivatives) Directions, 2022.
  • Regulation 4 of the Principal Regulation is replaced, specifying permissions for authorized dealers regarding posting and collecting margins for permitted derivative contracts.
  • Authorized dealers are permitted to post and collect margin both in India and outside India for derivative contracts with persons resident outside India, and to receive and pay interest on such margin.
  • Authorized dealers are permitted to post and collect margin outside India for derivative contracts with other authorized dealers, provided at least one of them is a foreign bank branch and receive and pay interest on such margin.
  • Authorized dealers are permitted to post and collect margin in India and outside India for derivative transactions of their overseas branches and International Financial Services Centre Banking Units, and to receive and pay interest on such margin.
  • Authorized dealers may post and collect margin in India and outside India on behalf of their customers for permitted derivative contracts entered into with a person resident outside India and receive and pay interest on such margin.

Impact Analysis

Authorized Dealers

  • Action Items: Communicate the changes to relevant staff and provide training on the updated regulations.

Foreign Banks

  • Action Items: Ensure that at least one of the authorized dealers involved in a derivative contract is a branch of a foreign bank to comply with the new regulations for margin posting outside India.

Businesses with International Transactions

  • Action Items: Engage with authorized dealers to ensure compliance with the new regulations when entering into derivative contracts.

Customers of Authorized Dealers

  • Action Items: Review the impact on existing derivative contracts and margin arrangements.

Key Entities Referenced

Reserve Bank of India (RBI): The central bank of India, responsible for issuing and regulating foreign exchange management regulations. Authorized Dealers: Entities authorized by the RBI to deal in foreign exchange. Foreign Exchange Management Act, 1999: The legal framework governing foreign exchange transactions in India. Foreign Exchange Management (Margin for Derivatives Contracts) Regulations, 2020: The principal regulation being amended by this notification. Master Direction – Reserve Bank of India (Credit Derivatives) Directions, 2022: The master direction governing credit derivative contracts, referenced in the amendment. International Financial Services Centre (IFSC) Banking Units: Banking units operating within the IFSC, subject to these regulations for derivative transactions.
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रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99 सी.जी.-एम.एच.-अ.-06052024-254054 xxxGIDHxxx CG-MH-E-06052024-254054 xxxGIDExxx असाधारण EXTRAORDINARY भाग III—खण् ड 4 PART III—Section 4 प्राजधकार स ेप्रकाजित PUBLISHED BY AUTHORITY स.ं 315] िई ददल्ली, सोमर्ार , मई 6, 2024/र्िै ाख 16, 1946 No. 315] NEW DELHI, MONDAY, MAY 6, 2024/VAISAKHA 16, 1946 भारतीय ररज़र् व बकैं (जर्त्तीय बािार जर्जियमि जर्भाग) (केंद्रीय कायालव य) अजधसचू िा म ंबई, 30 अप्रलै , 2024 विदेशी मद्रु ा प्रबधं (व्यत् पन्नी सजं र्दा हते मार्जनि ) (प्रथम सशं ोधन) विवनयमार्ली, 2024 स.ंफेमा.399(1)/2024-आरबी.—विदेशी मुद्रा प्रबंध अवधवनयम, 1999 (1999 का 42) की धारा 47 की उपधारा (2) के खंड (ज) द्वारा प्रदत्त शवियों का प्रयोग करते हुए, भारतीय ररज़ि ि बैंक एतद्द्वारा विदेशी मद्रु ा प्रबंध (व्य त्पन्नी संजर्दा हते मार्िवि) विवनयमार्ली, 2020 [अवधसूचना स.ं फेमा.399/आरबी-2020 ददनांक 23 अक्टूबर, 2020] (इसके पश्चात 'मूल जर्जियमार्ली' कहा गया ह)ै म ेंजिम्नाि सार संिोधि करता ह,ै अर्ाित्: - 1. लघ िीर्कव और प्रारंभ (i) इन विवनयमों को विदेशी मुद्रा प्रबंध (व्य त्पन्नी संजर्दा हते मार्िवि) (प्रर्म संशोधन) विवनयमार्ली, 2024 कहा जाएगा। (ii) ये जर्जियम सरकारी राजपत्र म ें प्रकाशन की तारीख स ेलागू होंगे। 2915 GI/2024 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4] 2. मलू जर्जियमार्ली म ेंसशं ोधन (i) मलू जर्जियमार्ली के विवनयम 2 के खंड (v) के उप-खंड (ग) को वनम्नविवखत के सार् प्रवतस्र्ावपत दकया जाएगा, अर्ाित:् - ग) मास्टर वनदेश – भारतीय ररज़िि बैंक (ऋण व्य त्पन्नी) वनदेश, 2022 (अवधसूचना स.ंएफएमआरडी. डीआईआरडी.11/14.03.004/2021-22 ददनांक 10 फरिरी, 2022), समय-समय पर यथासंशोवधत, के अि सार ऋण व्य त्पन्नी संजर्दा दकया गया, तथा (ii) मूि विवनयमार्ली के विवनयम 4 को वनम्नविवखत के सार् प्रवतस्र्ावपत दकया जाएगा, अर्ाित:- 4. अनुमवत (1) अवधवनयम के तहत और तत्समय प्रिृत्त ररज़िि बैंक द्वारा जारी दकसी अन्य विवनयम म ेंदकसी बात के होत े हुए भी, और इस संबंध म ेंररज़िि बैंक द्वारा जारी वनदेशों के अधीन रहते हुए, प्रावधकृत व्यापाररयों को वनम्नविवखत की स्ट्र्ीकृजत ह:ै (i) भारत से बाहर के वनिासी व्यवि के सार् की गई अनुमत व्युत्पन्नी संविदा हते भारत म ेंऔर भारत से बाहर मार्िवि पोस्ट और एकत्र करना तथा ऐसे मार्िवि पर ब्याज प्राप्त करना और भुगतान करना। (ii) दकसी अन्य प्रावधकृत व्यापारी के सार् की गई अनुमत व्यत्ुपन्नी संविदा हते भारत स ेबाहर मार्िवि पोस्ट और एकत्र करना, बशत ेप्रावधकृत व्यापाररयों म ेंस ेकम स ेकम एक विदेशी बैंक की शाखा हो, तथा ऐस ेमार्िवि पर ब्याज प्राप्त करिा और भगुतान करिा। (iii) अपनी विदेशी शाखाओं और अतंरराष्ट्रीय वित्तीय सेिा केन्द्र बैंककंग इकाइयों के व्युत्पन्नी िेनदनेों हते भारत म ेंऔर भारत स ेबाहर मार्िवि पोस्ट और एकत्र करना, तथा ऐसे मार्िवि पर ब्याज प्राप्त करना और भुगतान करना। बशते दक ऐसे मार्जिन की पोसस्टंग और संग्रह और मार्जिन पर ब्याज की प्रावप्त और भगुतान प्राजधकृत व्यापारी या उसकी विदेशी शाखाओं या उसके विदेशी प्रधान कायाििय (इसकी विदेशी शाखाओं सवहत) द्वारा, ररज़ि िबैंक द्वारा जर्वनर्दष्टि वनयमों और शतों के अधीि दकया जाए। (2) उक्त अवधवनयम के तहत और तत्समय प्रिृत्त ररज़िि बैंक द्वारा जारी दकसी अन्य विवनयम म ेंदकसी बात के होत ेहुए भी, और इस संबंध म ेंररज़ि िबैंक द्वारा जारी वनदशे ों के अधीन, प्रावधकृत व्यापारी भारत स ेबाहर के वनिासी व्यवि के सार् की गई अनुमत व्युत्पन्नी संविदा हते अपने ग्राहकों की ओर स ेभारत म ेंऔर भारत के बाहर मार्िवि पोस्ट और संग्रह कर सकत े ह ैंऔर ऐस ेमार्जिन पर ब्याज प्राप्त और भ गताि कर सकत ेह ैं। जडम्पल भांजडया, म ख्य महाप्रबधं क [जर्ज्ञापि-III/4/असा./085/2024-25] फ टनोट:- मलू जर्जियमार्ली भारत के िासकीय राजपत्र – असाधारण : भाग III-धारा 4 म ें राजपत्र आईडी सीिी- एमएच-ई-28102020-222786 ददनांक 28.10.2020 [अवधसूचना स.ं फेमा 399/आरबी-2020 (विदेशी मुद्रा प्रबंध (व्य त्पन्नी संजर्दा हते मार्िवि) विवनयमार्ली, 2020) ददनांक 23 अक्टूबर, 2020] के माध्यम से प्रकाजित हुई थी।[भाग III—खण् ड 4] भारत का रािपत्र : असाधारण 3 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 (Margin for Derivatives Contracts) Regulations, 2020 [Notification No. FEMA.399/RB-2020 dated October 23, 2020] (hereinafter referred to as 'the Principal Regulation'), namely:- 1. Short title and commencement (i) These Regulations shall be called the Foreign Exchange Management (Margin for Derivatives Contracts) (First Amendment) Regulations, 2024. (ii) They shall come into force with effect from the date of their publication in the Official Gazette. 2. Amendment to the Principal Regulation (i) In the Principal Regulation, in Regulation 2, in clause (v), sub-clause (c) shall be substituted with the following, namely: - c) Credit Derivative Contract undertaken in terms of the Master Direction – Reserve Bank of India (Credit Derivatives) Directions, 2022 (Notification no. FMRD.DIRD.11/14.03.004/2021-22 dated February 10, 2022), as amended from time to time, and (ii) In the Principal Regulation, Regulation 4 shall be substituted with the following, namely:- 4. Permission (1) Notwithstanding anything contained in any other regulation issued by the Reserve Bank under the Act and for the time being in force, and subject to directions issued by the Reserve Bank in this regard, authorised dealers may: (i) Post and collect margin, in India and outside India, for a permitted derivative contract entered into with a person resident outside India, and receive and pay interest on such margin. (ii) Post and collect margin, outside India, for a permitted derivative contract entered into with another authorised dealer, provided that at least one of the authorised dealers is a branch of a foreign bank, and receive and pay interest on such margin. (iii) Post and collect margin, 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. Provided that 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 (including its overseas branches), subject to terms and conditions specified by the Reserve Bank. (2) Notwithstanding anything contained in any other regulation issued by the Reserve Bank under the Act and for the time being in force, and subject to directions issued by the Reserve Bank in this regard, authorised dealers may post and collect margin, in India and outside India, on behalf of their customers for a permitted derivative contract entered into with a person resident outside India and receive and pay interest on such margin. DIMPLE BHANDIA, Chief General Manager [ADVT.-III/4/Exty./085/2024-25] Foot Note:- The Principal Regulation was published in the Official Gazette of India – Extraordinary: Part III–Section 4, vide Gazette ID CG-MH-E-28102020-222786 dated 28.10.2020 [Notification no. FEMA 399/RB-2020 (Foreign Exchange Management (Margin for Derivatives Contracts) Regulations, 2020) dated October 23, 2020]. Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064 and Published by the Controller of Publications, Delhi-110054.

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