The Head/Principal Offices of all

Authorized Dealers in Foreign Exchange.

Dear Sirs / Madam,

Attention of Authorized Dealers is invited to the instructions contained in Paragraph-9 (a) (i) Chapter XX of the Foreign Exchange Manual, 2002, regarding trading of quoted shares by non-residents through Special Convertible Rupee Account (SCRA).

It has now been decided to allow non-residents to trade in shares in Futures Market through Special Convertible Rupee Account. Accordingly, following instructions are being added in the above Paragraph after the words “account- holders” appearing in the last line as under:

“Non-residents are allowed to trade in shares in Futures Market through SCRA, subject to the following procedure:

1. A separate sub-account under SCRA shall be opened by foreign investors through which an investor will route receipts/payments, initial margin, mark-to-market settlement, transaction charges, commission, fees etc.
2. Margins relating to Futures Contracts may also be routed through this account. However, while allowing refund of the margin through SCRA to a non-resident, the Authorized Dealer should ensure that the broker has quoted the date and instrument number under which the margin was received by them.
3. Authorized Dealers shall report information on market value of foreign investments through future trading in their weekly returns to the Statistics Department on the revised proforma as enclosed. The daily statement showing inflow/outflow and opening/closing balances in the SCRA shall however, continue to be reported to the Statistics Department on the prescribed proforma as advised vide EPD Circular Letter No.05/EPP.11(579)-2005 dated March 11, 2005.”