SEBI eases investment rules for NRIs in exchange traded derivatives

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As part of its initiatives to enhance the operational efficiencies and ease of doing investment levels, the Securities and Exchange Board of India (SEBI) has said that Non Resident Indians (NRIs) will no longer have to submit certain details that were required earlier for monitoring of NRI position limits in exchange traded derivatives contracts.

The capital market regulator has said that NRIs will no longer have to notify the names of Clearing Member/s and subsequent assignment of the unique client code -- known as Custodial Participant (CP) Code -- to the NRIs by the exchange.

"As a step towards ease of doing investment and convenience to NRIs for trading in exchange traded derivatives contracts, to bring in operational efficiency and in line with the recommendation received from Brokers’ Industry Standards Forum, 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," stated the SEBI circular.

"Accordingly, for NRIs trading in exchange traded derivative contracts without CP code, the Exchange/Clearing Corporation shall monitor the NRI position limits in the manner similar to the client level position limits monitored by them. Position limits for NRIs shall be same as the client level position limits specified by SEBI from time to time," added the circular.

SEBI has further directed stock exchanges and clearing corporations to advise their members to provide an option to existing NRI clients to exit from CP code on submission of request through email communication within 90 days.

They have been further directed to advise their members to make operational changes to provide an option to such NRI clients who initially opt for CP code but later decide to exit from CP code, on submission of request through email communication.