The Currency Futures Draft says that RBI should be single regulator for currency futures. The panel is divided on setting up special exchange Vs using existing bourses.
The margining of credit risk will be with exchanges, it added. The overall control for position limits will remain with the RBI, it added. The panel suggested that the RBI should stipulate participants and fix participant-wise position limit. The RBI should also decide contract design, the Panel advised.
The panel prefers single contract over multiple contracts. The contract size must be small if target audience is retail, it says. It also prefers cash settlement of currency futures contracts. The RBI panel wants currency futures contracts to mature mid-month. The currency future markets should be for residents - FIIs, NRIs should only be there as hedgers, it feels. Brokers and banks may be allowed as intermediaries. Only dollar-rupee contract will be permitted initially, the draft says.
Source: Moneycontrol.com
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