Comments
The Reserve Bank of India has decided to permit 30 day foreign currency-rupee swaps equal to the amount invested by FIIs in Indian initial public offerings under ASBA for the purpose of hedging.
“Initial Public Offerings-related transient capital flows under the Application Supported by Blocked Amount (ASBA) mechanism, foreign currency-rupee swaps may be permitted to the FIIs,” the RBI said.
The bank has increased the limits of cancellation and rebooking of forward contract cover of FII portfolios from 2 per cent of portfolio value as at the beginning of the fiscal to 10 per cent with immediate effect.
The swap contracts, once cancelled, cannot be rebooked. And rollovers are not permitted under this scheme. Under the ASBA facility, the application money of investors remains blocked in his bank account until the process of allotment of shares is completed.
SEBI recently made ASBA facility mandatory for all non-retail investors (high net-worth investors and institutional investors) investing in public and rights issues. The ASBA facility for public offers was introduced in September 2008 for retail investors.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.