IDMC.No.PDRS.3346 /10.02.01/99-2000

To,

Dear Sirs,

In terms of Notification No.S.O.2561 dated 27^th June 1969 issued by Government of India under section 16 of the Securities Contracts (Regulation) Act, 1956 all forward contracts in securities had been banned excepting ready forward transactions specifically exempted by the Government. Government of India has now rescinded the 1969 notification and delegated powers to Reserve Bank of India under section 16 of the Securities Contracts (Regulation) Act for regulating contracts in government securities, money market securities, gold related securities and derivatives based on these securities. The copies of notifications issued by Government of India, Reserve Bank of India and Securities and Exchange Board of India in this connection are enclosed for your information.

In terms of the second proviso to the notification of the Reserve Bank of India referred to above, ready forward contracts as described in the proviso (including Reverse Ready Forward contracts), may be entered into in accordance with the terms and conditions and among the participants as specified here under:

1. ready forward contracts are undertaken only in Treasury Bills and dated securities of all maturities issued by the Government of India and State Governments.
2. ready forward contracts in the securities specified at (a) above may be entered into by a banking company, a cooperative bank or any person maintaining a Subsidiary General Ledger Account and a Current Account with RBI Mumbai, only among themselves. The list of non-bank entities currently having SGL and Current Account with Reserve Bank of India, Mumbai office is enclosed in Annexure – I
3. such ready forward contracts shall be settled through the Subsidiary General Ledger Accounts of the participants with Reserve Bank of India at Mumbai, only , and
4. no sale transaction should be put through without actually holding the securities in the portfolio.

Please acknowledge receipt.

Yours faithfully,

Sd/-
(Usha Thorat)
Chief General Manager
Encl : as above

1. The Discount and Finance House of India Ltd.
2. Gilt Securities Trading corporation Ltd.
3. ICICI Securities and Finance Co.Ltd.
4. PNB Gilts Ltd.
5. SBI Gilts Ltd.
6. Securities Trading Corporation of India Ltd.
7. DSP Merrill Lynch Ltd.
8. Ceat Financial Services Ltd.
9. Kotak Mahindra Capital Company (unlimited)
10. Birla global Finance Company Ltd.
11. Hoare Govett (India) Securities Ltd.
12. Dil Vikas Finance Ltd.
13. SREI International Securities Pvt. Ltd.
14. Tower Capital and Securities Pvt. Ltd.
15. Tata Finance Securities ltd.
16. Canbank Mutual Fund
17. Export Credit Guarantee Corporation of India Limited
18. Export Import Bank of India
19. General Insurance Corporation of India
20. GIC Mutual Fund
21. Indian Bank Mutual Fund
22. Industrial Credit & Investment Corporation of India Limited
23. Industrial Development Bank of India
24. IDBI Mutual Fund
25. ITC Thread Needle Mutual Fund
26. Life Insurance Corporation of India
27. National Bank for Agriculture and Rural Development
28. National Housing Bank
29. New India Assurance Company Limited
30. Oriental Insurance Company Limited
31. Reliance Capital Mutual Fund
32. SBI Mutual Fund
33. Small Industries Development Bank of India
34. Unit Trust of India
35. LIC Mutual Fund
36. J.M.Mutual Fund
37. Birla Mutual Fund
38. Kothari Pioneer Mutual Fund
39. Jardine Fleming Mutual Fund
40. Kotak Mahindra Mutual Fund
41. JP Morgan Securities India Private Limited
42. ABN AMRO Securities (India) Pvt. Limited
43. Deutsche Securities (India) Private Limited
44. Industrial Investment Bank of India Limited
45. Bank of India Mutual Fund
46. Sun F & C Mutual Fund
47. Prudential ICICI Mutual Fund
48. Housing Development Finance Corporation Limited
49. Stock Holding Corporation of India Limited
50. SICOM Limited
51. Dundee Mutual Fund
52. Templeton Mutual Fund
53. IDBI Capital Market Services Limited
54. Tata Trustee Company Limited A/c Tata Mutual Fund
55. DSP Merrill Lynch Mutual Fund
56. Deposit Insurance and Credit Guarantee Corporation
57. Industrial Finance Corporation of India
58. Corpbank Securities
59. Zurich India Mutual Fund
60. Alliance Capital Mutual Fund
61. Il&FS Mutual Fund
62. BoB Mutual Fund
63. National Securities Clearing Corporation Ltd.
64. National Securities Depository Ltd.