Certain stock brokers can take prop position in currency pairs

Sebi today said non-banking stock brokers can take proprietary open positions in currency derivative market up to certain prescribed limits.
In a circular, the capital market regulator said that a stock broker, who is not a bank, can take proprietary open position limits in currency derivatives.
Proprietary open position refers to taking position with one's own money.
The proprietary open position should not exceed 15 per cent of the total open position or not more than USD 50 million of the equivalent currency.
The circular pertains to Indian rupee contracts against the US dollar, euro, British pound and Japanese yen.

"Proprietary open position limits of a stock broker, who is not a bank, across all contracts in a permitted currency pair shall be higher of 15 per cent of the total open interest in the currency pair or USD 50 million/ EUR 25 million/ GBP 25 million/ JPY 1000 million, as applicable," it said.
In June, foreign portfolio investors were allowed to participate in the domestic exchange-traded currency derivatives.