What happened
The Securities and Exchange Board of India (SEBI) issued a circular on 5 November 2026 titled “Revision of limits relating to requirement of underlying exposure for currency derivatives contracts”. Its reference is HO/(561)2026-MRD-POD2/I/25177/2026.
The circular concerns the limits connected to the requirement of an underlying exposure for currency derivatives. The specific new limits, the categories of participants covered and the effective date are not part of the details confirmed here, so this article does not state them.
What it means for you
A currency derivative is a contract whose value depends on an exchange rate, such as the rupee against the dollar. An underlying exposure is a real need for foreign currency, for example from imports, exports or foreign-currency loans, that a trader can point to when taking a position.
The circular revises limits tied to that requirement. If you trade currency contracts or manage foreign-currency risk for a business, check the full circular on the SEBI website and your broker’s or exchange’s notices for the exact limits and the date they apply.
For background on how such contracts work, see our explainer on futures and options (F&O). Rupee movements are covered in our report on the rupee’s latest close.
Background
SEBI is the regulator of India’s securities markets, including exchange-traded currency derivatives. It issues circulars to set or change rules for market participants. Further details will be clear once the full text of the circular is read alongside any notices from exchanges.
