India relaxes rules on exchange-traded derivatives
The new ruling will allow investors to take positions in all exchange-traded derivatives, including index options, stock options and stock futures, subject to certain restrictions.
The RBI guidelines to custodial banks allow foreign investors to take up to 15% of the open interest or 1 billion rupees, whichever is higher, in index futures and options. Contracts on stock futures and options are now limited to 7.5% of the open interest or 500 million rupees - again depending on whichever is higher.
The gross open position across all derivatives contracts on a particular underlying cannot exceed either 1% of the free-float market capitalisation – in number of shares – or 5% of the open interest in the derivatives contracts on a particular underlying stock – by number of contracts.
