Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000 An International Foreign Exchange Master Agreement (IFEMA) is a two-party master`s contract for cash and futures trading on the foreign exchange market (Forex). A framework agreement is a standard agreement between two parties, which sets standard conditions for all these transactions between the parties. The IFEMA agreement covers all facets of these foreign exchange transactions and provides detailed practices for the establishment and settlement of a Forex contract. In addition to the terms of the contract, IFEMA explains the consequences of delay, force majeure or other unforeseen circumstances. Notification 25/2000-RB, dated 3. May 2000 – In the exercise of the powers conferred by Section h) Desagb (h) of Section 47 of the Foreign Exchange Management Act of 1999 (42 of 1999), the Reserve Bank adopts the following provisions to promote the orderly development and maintenance of the foreign exchange market in India, namely: the International Foreign Exchange Master Agreement (IFEMA) was published in 1997. It was originally developed by the British Bankers` Association and the Foreign Exchange Committee (an advisory committee sponsored by the Federal Reserve Bank of New York, but independently). IFEMA was published in 1997 by these two groups in collaboration with the Canadian Research Exchange Committee and the Tokyo Information Exchange Market Practices Committee. 3A. A person residing outside India may enter into a futures contract with a licensed trader in India, subject to the conditions prescribed from time to time by the Reserve Bank of India, to cover the foreign exchange risk arising from his proposal for foreign direct investment in India.3B.

An Indian-based person with foreign direct investments in India may enter into futures contracts with Ruupien as one of the currencies, provided that maturity hedging is taken only after the board approves the price, in order to cover the risk of ”Curency” on the dividends it receives from the Indian company. (Via paragraph 3A. – 3B. was emptied notification No. FEMA 104/2003-RB, DT. 21.10.2003) 2A. A non-resident Indian may, under the conditions prescribed from time to time by the Reserve Bank of India, occasionally impose currency contracts (excluding rupees) in order to convert balances held in FCNR (B) accounts into another foreign currency in which FCNR (B) deposits may be held. (via paragraph 2A. was the subject of a No. FEMA 104/2003-RB, DT.

21/10/2003 Currency derivative contract for a person residing in India Investigations, it appeared that, although there have been a number of significant changes in the foreign exchange market since 1997 and that many new contracts have been concluded with an updated ISDA management contract (from 2002), many participants have benefited from the IFEMA and FEOMA agreements.