RBI Allows Resident Entities to Hedge Their Exposures to Gold Price Risk Using OTC Derivatives in IFSCs

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Last Updated on 16 April, 2024

OTC Derivatives in IFSCs

Circular No. RBI/2024-25/17 A. P. (DIR Series) Circular No. 01; Dated: 15.04.2024

Earlier, resident entities were permitted to hedge their exposure to the price risk of gold on exchanges in the IFSC recognised by the IFSCA. To provide flexibility to resident entities for hedging their gold price risk exposures, the RBI has now decided to permit resident entities to hedge these exposures using OTC derivatives in IFSC, in addition to derivatives traded on exchanges in IFSC.

This is subject to certain stipulations set out in master directions on ‘Hedging of Commodity Price Risk and Freight Risk in Overseas Markets’. These instructions shall apply with immediate effect.

Click Here To Read The Full Circular

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