RBI issues new Directions u/s 10(4) & 11(1) of FEMA for Margin in Derivative Contracts, superseding previous Circular.

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....The Reserve Bank of India (RBI) issued Circular No. 05 on May 08, 2024, regarding Margin for Derivative Contracts. This circular supersedes the previous Circular No. 10 of 2021. It pertains to the Foreign Exchange Management Act, 1999, and is issued u/s 10(4) and 11(1) of the Act. The circular applies to Authorized Dealer Category-I (AD Cat-I) banks and Authorized Dealer Category-III Standalone Primary Dealers (AD Cat-III SPDs). The new Directions are effective immediately and replace the previous circular. The aim is to regulate margin requirements for derivative contracts involving residents in India and outside India.....