Sebi Relaxes NRI Derivatives Trading Norms

New Delhi, Jul 29 (PTI) Markets regulator Sebi on Tuesday decided to abolish the mandatory requirement for NRIs to notify the names of clearing members or obtain a custodial participant (CP) code for trading in derivatives.

Moreover, their position limits will be monitored at the client level, similar to domestic investors.

The decision, based on the recommendation received from Brokers' Industry Standards Forum, is aimed at facilitating ease of doing investment to NRIs for trading in exchange traded derivatives contracts and bringing in operational efficiency.

"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," Sebi said in its circular.


For NRIs trading in exchange-traded derivative contracts without CP code, the exchange/clearing corporation would monitor the NRI position limits in the manner similar to the client-level position limits monitored by them, it added.

Position limits for NRIs would be same as the client-level position limits specified by Sebi from time to time.

At present, NRIs are required to 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.

The regulator has directed stock exchanges and clearing corporations to implement the revised norms within 30 days. Also, they have been asked to allow existing NRI clients to opt out of the CP code framework by submitting an email request within 90 days.

Further, members will be required to offer an option to NRIs who initially opt for CP code but later decide to exit, based on an email request.