As you are aware, the Reserve Bank in its latest Annual Report has announced to expand the option market in the coming years to allow market participants to hedge more easily and cheaply. Going forward, the Reserve Bank will actively engage with the banks and other stakeholders in bringing out necessary regulatory changes to foster promotion of liquidity in the option market.
As an important step in this direction, we would like market bodies like FAI/FEDAI to give us a well- deliberated feedback on the need to allow corporates to write covered options and also take on simple structures like call-spreads with appropriate safeguards. FPI participation in the currency derivatives market 21.