Zerodha alerts: Asks to Close FX Derivatives by April 5 & follow RBI Rules
India's web-based business firm Zerodha Broking Ltd has on Tuesday, April 2, advised its clients to close forex subsidiary situations by Friday, April 5, in consistence with the Reserve Bank of India (RBI) standards. From Thursday, April 4, the clients will actually want to leave their current positions yet won't be permitted to take any new situations in the financial category.
The clients should present the declaration form to take new positions. The RBI has commanded dealers to obligatorily have a hidden contracted exposure to foreign currencies if they have any desire to exchange the cash subsidiaries segment.
The organization likewise referenced that brokers with openings more prominent than $100 million (notional agreement value), will be expected to select a custodian member or an approved seller.
For dealers with a more modest exposure, a statement expressing exchanging monetary standards for supporting contracted exposure will trick.
On this subject, the company said, “If the user fails to provide a declaration, then they will not be allowed to take any fresh positions in the currency segment beginning Thursday, April 4, even as they will be permitted to exit existing positions. It is advised to closely monitor open positions as liquidity may diminish leading up to April 5, 2024, when the RBI circular takes effect”.
While talking about regulatory risks, Nithin Kamath, Zerodha CEO stated in his post on X, “As per RBI guidelines, traders need to have exposure to the underlying currency to trade in currency derivatives on the stock exchange. Please ensure to close your open position before 05th April 2024 to be compliant with RBI rules”.
Further Nithin added“The RBI has its own reasons for restricting unhedged currency derivatives, but this means the death of currency derivative trading on stock exchanges by retail traders".
