Covered options permitted for resident exporters and importers to write against contracted exposures, subject to bank approvals and safeguards. Permits resident exporters and importers to write standalone plain vanilla European covered call and covered put currency option contracts to AD Category I banks against contracted export or import exposures, treating such covered options as structured derivative products and not as hedges. AD Category I banks must obtain internal approvals, assess the writer's risk management and financial strength, treat the underlying exposures as unhedged for capital and provisioning, may require margin or collateral, report transactions to the designated reporting platform, and observe limits on maturity and permissible combinations.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Covered options permitted for resident exporters and importers to write against contracted exposures, subject to bank approvals and safeguards.
Permits resident exporters and importers to write standalone plain vanilla European covered call and covered put currency option contracts to AD Category I banks against contracted export or import exposures, treating such covered options as structured derivative products and not as hedges. AD Category I banks must obtain internal approvals, assess the writer's risk management and financial strength, treat the underlying exposures as unhedged for capital and provisioning, may require margin or collateral, report transactions to the designated reporting platform, and observe limits on maturity and permissible combinations.
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