SEBI increased the INR currency derivatives exposure limit to USD 5 million for FPIs and domestic clients, effective 5 November 2026.
Higher Derivatives Exposure Limits for FPIs, Domestic Clients
Through a circular dated 5 November 2026, SEBI revised the permissible exposure limit for INR currency derivatives, raising it to USD 5 million for both Foreign Portfolio Investors (FPIs) and domestic clients. The move aims to enhance market liquidity and encourage greater participation in the domestic forex derivatives segment.
The increased cap applies to transactions in over-the-counter and exchange-traded currency derivatives linked to the Indian rupee. Regulated entities must ensure adherence to KYC, reporting, and risk management norms under the new thresholds. SEBI stated that the revision aligns with evolving market volumes and hedging demands.
Market participants should update internal exposure tracking systems and revalidate client eligibility. The change facilitates larger hedging strategies for institutional investors while maintaining systemic risk controls.
