RBI relaxes norms on collaterals for FIIs
The Reserve Bank of India (RBI) on Monday, 12 April 2010, allowed foreign institutional investors (FIIs) to use their government bond holdings as well as foreign sovereign securities with AAA rating as collateral for stock market transactions, doing away with an earlier rule that only allowed cash to be used. However, cross-margining of government Securities placed as margins by FIIs for their transactions in the cash segment will not be allowed between the cash and the derivatives segments of the market, RBI said.
FIIs are allowed to offer cash and foreign sovereign securities with AAA rating as collateral to the recognized stock exchanges in India for their transactions in the derivatives segment.
Source:- bloombergutv.com
