All market participants
Separate limit of Interest Rate
Futures (IRFs) for Foreign Portfolio Investors (FPIs)
Please refer to Paragraph 8 of
the statement on Developmental and Regulatory Policies, issued as part of
the third Bi-monthly Monetary Policy Statement for 2017- 18 dated
August 02, 2017, wherein a separate limit of Interest Rate Futures for
Foreign Portfolio Investors was proposed.
2. Currently, the FPI limit for
Government Securities (G-secs) is fungible between investments in G-secs
and investment in IRF. FPI long positions in IRF are not allowed on G-sec
limit utilisation reaching 90%. To facilitate further market development
and to ensure that access of FPIs to IRFs remains uninterrupted, it has
been decided to allocate FPIs a separate limit of ? 5,000 crore for long
position in IRFs. Accordingly, para 4.2 of the RBI Directions No.
IDMD.PCD.07/ED(RG)-2013 dated December 05, 2013 is amended to read as
“Foreign Portfolio Investors,
registered with Securities and Exchange Board of India, are permitted to
purchase or sell Interest Rate Futures subject to the following conditions:
(i) the aggregate long position
of all FPIs, each of whom has a net long position in any IRF instrument,
shall not exceed ? 5000 crore, aggregated across all IRF instruments,
(ii) the total gross short
(sold) position of any Foreign Portfolio Investor shall not exceed its
consolidated long position in Government securities and Interest Rate
Futures, at any point in time”.
3. The limits prescribed for
investment by FPIs in G-secs (currently ? 3,01,500 crore) will be
exclusively available for investment in G-secs. All other terms and
conditions of the extant IRF directions will remain unchanged.
4. The detailed operational
guidelines in this regard will be issued separately by SEBI.
5. The above directions are
issued under section 45 (W) of the RBI Act, 1934.
Chief General Manager