Detailed procedural prescriptions have been replaced with basic principles, thereby allowing – greater operational flexibility for market participants. Earlier restrictions on design of derivative contracts and cancellation and rebooking of foreign exchange derivatives have been dispensed with. Distinctions based on residency have been removed or reduced, bringing foreign participants at par with domestic entities in terms of market entry and exit.
While retaining the existence of underlying exposures as the basis for access, greater flexibility and ease of hedging have been brought in by allowing anticipated exposures to be hedged. Users with limited/small hedging requirements have been allowed to enter into contracts equivalent of USD 10 million without the need to establish the existence of underlying exposures. 13.