OTHER GROUP COMPANIES
market

Foreign investors to use 'Put' and 'Call' options: RBI

RBI has amended the foreign exchange management regulations to allow use of put and call options

January 08, 2014 9:17 IST | India Infoline News Service
The Reserve Bank of India has allowed foreign investors to use 'call' and 'put' options to structure their investments in India.

RBI has amended the foreign exchange management regulations to allow use of these financial instruments, which are extensively used by private equity players for structuring of cross-border mergers and acquisitions.

"Further, shares or convertible debentures containing an optionality clause but without any option/right to exit at an assured price shall be reckoned as eligible instruments to be issued to a person resident outside India by an Indian company," RBI said in a notification published in the gazette.

A 'call' option allows a holder to buy shares in an entity at an agreed price while a 'put' option allows an investor to sell.

OPEN A DEMAT ACCOUNT & Get
FREE Benefits Worth 5,000

FEATURED ARTICLE

BLOGS

Open Demat Account

  • 0

    Per Order for ETF & Mutual Funds Brokerage

  • 20

    Per Order for Delivery, Intraday, F&O, Currency & Commodity