Can I buy OTC Index Derivatives from Foreign Underwriter


We wish to buy Weather Derivative from a credible US based underwriter. This is to cover our business exposure to adverse weather events.

Have reviewed the RBI regulations relating to remittance and SEBI regulations relating to securities trading but none of them have any clear cut guidelines on legality or otherwise of such transaction.

I wish to know the following:

  1. Does RBI allow / restrict such transaction - would be glad if you can share appropriate regulations as well.
  2. If it is allowed - who are allowed to purchase such derivatives?
  3. Also, if it is allowed, what kind of transaction limits are placed for such transactions.

Would be helpful if anyone can respond on this information request.

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