09 february 2007
relaxes fii norms on forward contracts
mumbai: the reserve bank of india has allowed fiis
to cancel and rebook forward contracts up to 2 per cent
of the market value of their investments in equity and-or
debt in india. a notification by the rbi said the limit
for calculating the eligibility for re-bookings shall
be based on the market value of the portfolio as at the
beginning of the financial year (april - march).
outstanding contracts must be duly supported by underlying
exposure at all times it said. the rbi in the mid-term
review of annual policy, 2006-07 allowed fiis to rebook
25 per cent of the cancelled forward contracts, provided
such contracts are supported by underlying exposure.
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