Trading norms eased by SEBI for NRIs in derivatives market
Trading norms eased by SEBI for NRIs in derivatives market
Their position limits will be monitored at the client level, like domestic investors
The Securities and Exchange Board of India (SEBI) has decided to abolish the mandatory requirement for Non-Resident Indians (NRIs) to notify the names of clearing members or obtain a custodial participant (CP) code for trading in derivatives.
The decision came after receiving recommendations from the Brokers' Industry Standards Forum to bring in operational efficiency.
SEBI’s circular reads, "It has been decided to do away with the mandatory requirement of NRIs having to notify the names of the clearing member/s and subsequent assignment of CP code to the NRIs by the exchange.”
For NRIs trading in exchange-traded derivative contracts without a CP code, the exchange/clearing corporation would monitor the position limits similar to the client-level position limits.
The position limits for NRIs would be the same as the client-level position limits specified by the market regulator from time to time.
Presently, NRIs must inform stock exchanges about their clearing member and obtain a CP code, which is used by exchanges to track their positions in the derivatives segment.
SEBI has directed stock exchanges and clearing corporations to implement the revised norms within 30 days. However, they can allow existing NRI clients to opt out of the CP code framework by submitting an email request within 90 days. The NRIs who initially opt for the CP code but later decide to exit will have the option to send an email request.
