Mark to Market gains and losses to be settled on T+1 day:RBI

Subscribe to Oneindia News

Mumbai, June 13 (UNI) In a move to operationalise currency future trading efficiently, the Reserve Bank of India has suggested to settle the mark to market gains and losses in cash before the start of trading on T+1 day.

If mark to market obligations are not collected before start of the next day's trading, the clearing corporation shall collect correspondingly higher initial margin to cover the potential for losses over the time elapsed in the collection of margins, RBI said in a report on ''Exchange Traded Currency Future'', placed on its website today.

The apex bank stated that the daily closing price of currency futures contract for mark to market settlement would be calculated on the basis of the last half an hour weighted average price of the futures contract.

''In the absence of trading in the last half an hour the theoretical price would be taken. The eligible exchanges shall define the methodology for calculating the 'theoretical price' at the time of making an application for approval of the currency futures contract to Securities and Exchange Board of India (SEBI),'' RBI said.

The Central Bank also suggested that the Exchange shall impose stringent penalty on members who do not collect margins from their clients and should conduct regular inspections to ensure margin collection from clients.

MORE UNI PP OBB SM1901

Please Wait while comments are loading...