Reserve Bank of India, vide its Circular dated 11th October, 2022, made a reference to circular DNBR (PD) CC.No.094/03.10.001/2018-19 dated July 27, 2018 in terms of which SPDs, as part of their non-core activities, are permitted to offer foreign exchange products, as allowed from time to time, to their Foreign Portfolio Investor (FPI) clients.
As proclaimed in the Statement on Developmental and Regulatory Policies Para 3 dated 5th August, 2022, it has been decided to allow (Standalone Primary Dealers) SPDs to offer all foreign exchange market-making facilities to users, as currently permitted to Category-I Authorized Dealers, subject to adherence to the prudential regulations and other guidelines to be issued separately in this regard.
Further, all financial transactions involving the Rupee undertaken globally by related entities of the SPD shall be reported to CCIL’s Trade Repository before 12:00 noon of the business day following the date of transaction will be applicable with effect from 1st January, 2023.
Further, SPDs shall comply with other regulations contained in the aforementioned Circular and prudential regulations issued by Reserve Bank from time to time. All the instructions contained in the Master Direction – Reserve Bank of India (Market-makers in OTC Derivatives) Directions, 2021 (FMRD.FMD.07/02.03.247/2021-22) dated September 16, 2021 shall also apply to SPDs and the Master Direction – Standalone Primary Dealers (Reserve Bank) Directions, 2016, is being modified accordingly.
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