The Securities and Exchange Board of India (SEBI) on November 05, 2026, issued a circular regarding the revision of underlying Exposure Limits for Currency Derivatives Contracts.
The following has been stated: -
•The Securities and Exchange Board of India (SEBI) has revised the threshold limits for taking positions in Indian Rupee (INR)-involving currency derivatives contracts without establishing underlying exposure, in line with the Reserve Bank of India (RBI) Circular No. 25 dated October 10, 2026.
•Domestic clients and Foreign Portfolio Investors (FPIs) may take long or short positions up to a combined limit of USD 5 million (outstanding notional value) across all INR currency pairs and recognised stock exchanges without underlying exposure.
•FPIs must ensure that their short positions do not exceed USD 5 million, while long positions exceeding this limit require underlying exposure in Indian debt or equity securities.
•Domestic clients may take positions exceeding USD 5 million subject to RBI-prescribed conditions.
•Stock exchanges and clearing corporations must implement the revised requirements and make necessary amendments to their rules and regulations.
[Circular No.: HO/(561)2026-MRD-POD2/I/25177/2026]
