SEBI raises trading limits in currency derivatives

MUMBAI (Reuters) - India's capital market regulator has allowed companies to increase their exposure to the currency derivatives market by raising position limits for clients and non-bank trading members.

In a statement on its website on Tuesday, the Securities and Exchange Board of India said the limit on the gross open position of a client across all contracts is now 6 percent of the total open interest or $10 million whichever is higher. The earlier limit was 6 percent of total open interest or $5 million.

For non-bank trading members, the gross open position limit is 15 percent of total open interest or $50 million whichever higher, up from 15 percent of total open interest or $25 million previously.

The position limits are specific to an exchange and not to the exchange traded derivatives market as a whole, the statement said.

Currency futures in India are currently offered by three exchanges including the National Stock Exchange, the Bombay Stock Exchange and the MCX-SX, a unit of the Multi-Commodity Exchange of India, the country's largest commodity trading bourse.

Volumes have steadily picked up since trading began in late August last year. At 10:40 a.m. on Wednesday, the most traded near-month contracts on the National Stock Exchange and MCX-SX were quoting at 50.9525 and 50.95 respectively, with the total traded volume on both exchanges at about $280 million.