Indian hedge funds barred from currency derivatives

Abstract

In an effort to reduce speculation in the currency market, the Securities and Exchange Board of India (Sebi) has asked domestic hedge funds to sign an undertaking they will not invest in foreign exchange derivatives as a condition for approving their registration application. The hedge fund industry in India has slowly been opening up. Four hedge funds were approved late last year while a further eight have received the green light this year, according to Sebi's official list of registered hedge funds as of April 22.