thnx @dcd i was also planning on skipping this segment 
I believe it was a weird and a little unclear move by RBI well letās give it time and see what happensā¦
Makes senseā¦
Still, no forms were available to provide the declaration.
How does one know how much exposure is in foreign currency?
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where is the form? you are cutting things very close!
For currency trading,
can we do Intraday positions? like system Sq off by 4:40 pm
Currency Option sellers have vanished, and the premiums have gone up a lot.
RBI should at least ensure an orderly winding down based on their circular.
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Completely agree. Only a nuc explosion justifies these kind of option price volatility. This particular punch from RBI was definitely below the belt and 100% immoral, if not illegal.
@VenuMadhav , @mohitmehra . Can you please convey this screenshot/message to higher ups so they can discuss with exchanges/RBI?
Also, still awaiting the declaration form.
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Hi, Can anybody explain What does it exactly mean to have underlying exposure ? is that mean we should have actual foreign currency in our account ? What is the declaration ? So now the retail traders like me will not be able to trade in currency derivatives
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Itās available at the end of the bulletin here: Change in eligibility to trade in currency derivatives
The process of uploading is also provided.
RBIās stance is that this has always been the case (since 2014) and is not a newer regulation. As Iāve said earlier, broker associations also met up with RBI as late as last evening, RBI is unwilling to budge.
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Contracted exposure is defined by RBI as āii. Contracted exposure - An exposure to the exchange rate of Rupee against a foreign currency on account of current and capital account transactions permissible under FEMA, 1999 or any rules or regulations made thereunder, which have already been entered into.ā
You can trade CDS only if you have underlying exposure to currencies. Else, youāll be in violation of FEMA guidelines.
Can you please explain in some simple terms as this is too technical for me. Thanks
Hi,
This is the time when Zerodha could have provided proactive support to retail traders but their lethargic approach and dilly dallying attitude might seemingly erode the confidence of traders in Zerodha. RBI had these guidelines issued to brokers for quite a while but they have taken no efforts to educate or warn the consumers about it. Even till the end they fail to provide that declaration form. Where is that form? Will you be providing that form at 1:55 pm on 4th April and expect us to submit it in time. Very disappointed.
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What is the meaning of underlying exposure to currencies ?
Hey Abhishek,
The form is shared here at the end of the bulletin.
Bulletin link: Change in eligibility to trade in currency derivatives
Submit here: Contact us
Had replied earlier:
The circular was out for everyone to see. Not deflecting responsibility, but weāve been in touch with the stock exchanges, who were in turn trying to seek clarification from the regulators including RBI. No one anticipated that a circular could wipe out the entire currency derivative segment. Even the Exchange circulars were issued only last night. Even today, the broker associations were met up with the RBI to figure an alternate since the implementation of this rule will spell the near death of the CDS segment. Sadly, nothing materialized.
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But now who will be responsible for our big loss and who will compensate it ? It is not our fault at all. Why Zerodha did not informed the clients wee in advance ?
What it means by evidence of underlying exposure ?
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This thread is active from March 07, were you sleeping?
Thread was active but how could we know that something like this is going to happen. We are not supposed to look for thread everytime. The broker should have at least send some notification or warning. but nothing was there
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