09 february 2007

rbi relaxes fii norms on forward contracts
mumbai: the reserve bank of india has allowed fiis to cancel and rebook forward contracts up to 2 per cent of the market value of their investments in equity and-or debt in india. a notification by the rbi said the limit for calculating the eligibility for re-bookings shall be based on the market value of the portfolio as at the beginning of the financial year (april - march).

the outstanding contracts must be duly supported by underlying exposure at all times it said. the rbi in the mid-term review of annual policy, 2006-07 allowed fiis to rebook 25 per cent of the cancelled forward contracts, provided such contracts are supported by underlying exposure.

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