Overseas Portfolio Investment expanded to include units or instruments of regulated overseas funds, widening eligible Indian investors.
Investment (including sponsor contribution) in units or any other instrument issued by an overseas investment fund or vehicle, duly regulated by the host jurisdiction (including where regulation is effected through a fund manager), shall be treated as Overseas Portfolio Investment (OPI). Outside IFSCs, such OPI may be made by listed Indian companies and resident individuals; within IFSCs, unlisted Indian entities may also make such investments, subject to applicable limits and schedule V of the Overseas Investment Rules.

Sale-to-public requirement for foreign currency notes mandates closer matching of purchases and sales and enhanced recordkeeping.
From July 1, 2024, FFMCs and non-bank ADs Category II must ensure that quarterly sales of foreign currency notes to the public are at least seventy-five percent of purchases from other FFMCs/ADs, maintain sale and purchase data for audit/inspection, may seek counterpart data to verify compliance, and must submit an annual audited balance sheet with a statutory auditor's certificate on Net Owned Funds to the Reserve Bank regional office by October 31.

Issuance of partly paid units: regularisation via compounding permitted subject to FIRMS reporting and AD bank compliance.
Regularisation is directed for issuances of partly paid units by Alternative Investment Funds to persons resident outside India made prior to the amendment, to be accomplished through compounding under the Foreign Exchange Management Act, 1999; before approaching the Reserve Bank for compounding, Authorised Dealer Category I banks must ensure reporting of such issuances on the FIRMS Portal and issuance of conditional acknowledgements, and notify their customers accordingly.

Margin requirements for derivative contracts permit cross-border posting and collection of eligible instruments under specified conditions.
Directions permit Authorised Dealers (AD Cat-I and AD Cat-III SPDs) to post and collect margin in India and abroad for permitted derivative contracts, receive and pay interest thereon, and for AD Cat-I banks to do so on behalf of customers. Eligible margin in India includes Indian currency, freely convertible foreign currency, Indian government debt, listed rupee bonds rated AAA, Certificates of Deposit, and A1-rated Commercial Paper; outside India, freely convertible foreign currency and foreign sovereign debt securities rated AA- or equivalent. ADs complying with foreign NCCD margin regimes may follow those jurisdictions' permitted forms and global arrangements. AD Cat-I banks must maintain separate accounts for non-resident cash margin.

Inclusion of Standalone Primary Dealers expands authorised dealer obligations and mandates trade repository reporting for OTC derivatives.
The Master Direction is amended to include Standalone Primary Dealers as Authorised Dealers under FEMA, extending definitional, operational and reporting obligations to them. Reporting processes are standardized through the Centralised Information Management System, timelines and formats for daily, weekly and quarterly submissions are revised, and new guidance covers SPDs' participation in exchange traded currency derivatives and overseas foreign currency borrowings with specified limits and reporting triggers. All Authorised Dealers must report OTC foreign exchange and foreign currency interest rate derivative contracts to the Trade Repository of CCIL under prescribed timelines, reconcile outstanding balances with the TR, and ensure reporting accuracy.

FPI debt investment limits maintained, sub-category allocations fixed and CDS sales capped relative to corporate bond stock.
FPI holdings in debt for 2024-25 retain ceilings of 6% for government securities, 2% for state government securities and 15% for corporate bonds, with investments in specified securities reckoned under the Fully Accessible Route. G sec incremental allocations remain 50:50 between General and Long term; SGS increases are added to the General sub category. Revised absolute ceilings are set for the two half year periods of 2024-25. The aggregate notional amount of Credit Default Swaps sold by FPIs is capped at 5% of outstanding corporate bond stock, with an additional notional limit specified for 2024-25.

Unauthorised forex trading: banks must vigilantly report facilitating accounts and direct customers to authorised channels.
AD Cat I banks must exercise heightened vigilance to prevent misuse of banking channels for unauthorised forex trading, report accounts facilitating such trading to the Directorate of Enforcement, and publicise that residents should transact only with Authorised Persons and on authorised ETPs, while referring customers to the RBI's authorised lists and Alert List.

Hedging of gold price risk permitted via OTC derivatives in IFSCs, subject to Master Direction stipulations and immediate effect.
Resident entities may hedge gold price risk in IFSCs using OTC derivatives as well as exchange-traded derivatives, subject to the stipulations of the Master Direction on hedging of commodity price and freight risk (as amended). The Master Direction has been updated and these instructions are effective immediately, issued under the prevailing foreign exchange regulatory framework while remaining without prejudice to any other statutory permissions or approvals.

Extension of FCRA registration validity continues where renewal is pending; certificate validity ends upon refusal of renewal.
Extension of validity of FCRA registration certificates is granted for entities with pending renewal applications or whose five year validity expires in the prescribed quarter, with validity extended until the earlier of disposal of the renewal application or the prescribed cutoff; refusal of a renewal application causes the certificate to be deemed expired on the date of refusal, rendering the association ineligible to receive or utilise foreign contribution.

Reporting obligation under Money Transfer Service Scheme requires authorised agents to file quarterly MTSS statements on the CIMS portal.
Authorised Persons who are Indian Agents under the Money Transfer Service Scheme must file a quarterly remittance statement on the Centralised Information Management System (CIMS) portal using return code R130, with a NIL report where no remittances were received; reporting is migrated from XBRL to CIMS and the Master Direction on reporting under foreign exchange law will be updated.

FDI caps in space sector updated: automatic entry up to specified thresholds; above that requires government route under space guidelines.
The Press Note amends FDI norms for the space sector by specifying sectoral caps and entry routes: satellite manufacture/operation, satellite data products, and ground/user segments permit FDI via automatic route up to a set threshold with higher proposals routed to government approval; launch vehicles and spaceports permit automatic entry up to a lower threshold with higher investments on government route; manufacturing of components/subsystems is permitted fully under the automatic route. Investee entities are subject to sectoral guidelines issued by the space authority and the changes take effect after the FEMA notification.

Import of gold under TRQ: advance payment remittance permitted to facilitate imports through IIBX.
Valid Tariff Rate Quota (TRQ) holders under the India-UAE CEPA as notified by IFSCA may import specified gold through IIBX against the TRQ, and AD Category I banks may remit advance payment on their behalf for eleven days, subject to the directions in A.P. (DIR Series) Circular No.04 dated May 25, 2022 and without prejudice to other statutory permissions.

Hedging of foreign exchange risk: revised directions permit specified derivatives, set user classifications and position monitoring requirements.
The circular revises the RBI's framework for foreign exchange risk management by consolidating prior directions and defining eligible products, users and operational conditions. Authorised Dealers may offer prescribed spot, OTC and exchange traded derivatives to retail and non retail users for hedging and other permitted purposes, with specific provisions for NDDCs and foreign currency interest rate derivatives. Dealers and exchanges must ensure hedges correspond to underlying exposures, comply with notional and tenor limits, provide mid market pricing to retail users, enable monitoring for large positions, and submit required reports; the Reserve Bank may impose or modify prudential limits as necessary.