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FEDAI Rules-10, Business Through Exchange Brokers.

Exchange brokers
Exchange Brokers’ Association
Recognition of brokers:
Exchange brokers’ contracts
Exchange brokerage payable by banks:

Chapter 10: Business through Exchange Brokers (Old Rule 3 reproduced)

  1. Exchange brokers
    When banks make contracts through brokers, such contracts only be made through, and exchange brokerage be paid only to accredited exchange brokers.

    No brokerage or other form of remuneration shall be paid by the banks to Munshis or other bank employees on contracts made in respect of any foreign exchange business.

    Accredited exchange brokers are permitted to contract exchange business on behalf of Authorised Dealers in foreign exchange only upon the understanding that they will conform to the rates, rules and conditions laid down by this Association.

    Direct dealings between banks, who are Authorised Dealers in foreign exchange, are permitted in centers which are serviced by recognized borkers’ associations, provided that the minimum lots for such direct deals shall be Pond Sterling 250,000 or US Dollar 500,000 or equivalent in other currencies. (AR 1.85 of 2.1.1985).

    In centers which are not serviced by recognized brokers’ associations, banks, who are Authorised Dealers in foreign exchange, are permitted to deal directly without any stipulation as to a minimum amount.

    Any accredited broker who knowingly concludes any exchange business contrary to the rules of this Association or to the intent of those rules may have his recognition withdrawn in consultation with the recognized brokers’ association in that center and no Authorised Dealer shall transact business with him thereafter.

    It shall be the duty of each Authorised Dealer and of a recognized brokers’ association to report to the Association’s committee for the center concerned the name of any broker who suggests or proposes any business which is contrary to the rules of this association. (see code of conduct for brokers/ bankers)
  2. Exchange Brokers’ Association

    In Bombay, Calcutta and Madras accredited brokers must be members of Exchange Brokers’ Associations which are recognized by this Association or must be brokers specially recognized by the Managing Committee in the case of Bombay and by the respective local committees in the case of Calcutta and Madras and must have made the required deposit of Rs. 10,000/- if in Bombay or Calcutta or Rs. 5,000/- if in Madras, in cash or in Government Securities, of equivalent market value with recognized Exchange Brokers’ Association or with the Association in the case of specially accredited brokers. Should an accredited broker wish to tender a fixed deposit receipt in lieu of cash or Government Securities required, a fixed deposit receipt, together with a suitable letter of lien may be accepted provided that the fixed deposit has been issued by an Authorised Dealer in foreign exchange and that the term of the fixed deposit is less than two years.

    The recognized Exchange Borkers’ Associations must approve and notify to this Association’s local committee at the center concerned all changes in their membership, in the composition of their member firms, and in the persons authorized to call on banks. Such advices must emanate from the recognized Brokers’ Association address either this Association or any of its Members on these matters direct.

    Disputes which may arise within the membership of any recognized Brokers’ Association must be settled by that Association among themselves. Such disputes may not be referred to this Association nor to any of its Members for arbitration or conciliation.
  3. Recognition of brokers:
    (This authority withdrawn vide Circular No. Mg. Com 27184 dated 9th October 1984.)

    Detailed arrangements for the recognition of the Exchange Brokers’ Association, or individual brokers where no such association has been formed, or where individual brokers are specially recognized, shall, at each center, be decided upon by the Committee at that centre.
  4. Exchange brokers’ contracts

    All contracts must bear the clause:
    “Subject to the Rules and Regulations of the Foreign Exchange Dealers’ Association of India”.

    No exchange contract shall be made with a broker as a principal or in a name known to be used by the broker for the purpose of jobbing. A bank must refuse to give delivery to or take delivery from any party other than the declared principal or a bank.
  5. Exchange brokerage payable by banks:

    [AR 1/89 dated 30.6.89] [ECS. 690/86 (Spl.)-88/89 dated 4.4.89] Type of Business Rate of brokerage (payable both by selling and buying banks) (I) Spot & outright forward business against the Rupee: All Currencies 0.007% i.e. 7 paise per Rs. 1000/- (II) Swap transactions in foreign curr- encies against the Rupee: i. ‘Short’ swaps i.e. where the delivery of the farther leg is due within the sport date: Rs. 500/- per US Dollar one million or equivalent for each leg of the transaction. ii. ‘Long’ swaps (i.e. other than ‘Short’ swaps): All Currencies 0.0105% i.e. 10.50 paise per Rs. 1000/- (III) Switches (i.e. sales of foreign currencies against foreign currencies spot or outright forward). Rs. 650/- per US Dollar one million or equivalent. (IV) Swaps in foreign currencies against foreign currencies (irrespective of period). Rs. 250/- per US Dollar one million or equivalent.

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Date: 06-06-2024
Notification No. 40/2024 - Customs (N.T.)
Exchange Rate Notification No. 40/2024-Cus (NT) dated 06.06.2024-reg

Date: 16-05-2024
Notification No. 36/2024 - Customs (N.T.)
Exchange Rate Notification No. 36/2024-Cus (NT) dated 16.05.2024-reg

Date: 02-05-2024
Notification No. 34/2024 - Customs (N.T.)
Exchange Rate Notification No. 34/2024-Cus (NT) dated 02.05.2024-reg.

Date: 18-04-2024
Notification No. 30/2024 - Customs (N.T.)
Exchange Rate Notification No. 30/2024-Cus (NT) dated 18.04.2024-reg.

Date: 15-04-2024
Notification No.29/2024-CUSTOMS (N.T.)
Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver- Reg

Date: 12-04-2024
Seeks to extend the due date for filing of FORM GSTR-1, for the month of March 2024

Date: 10-04-2024
NOTIFICATION No. 08/2024- Central Tax
Seeks to extend the timeline for implementation of Notification No. 04/2024-CT dated 05.01.2024 from 1st April, 2024 to 15th May, 2024

Date: 09-04-2024
Notification No. 28/2024-CUSTOMS (N.T.)
Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver- Reg.

Date: 08-04-2024
Notification No 07/2024 – Central Tax
Seeks to provide waiver of interest for specified registered persons for specified tax periods

Date: 05-04-2024
Notification No. 23/2024-Customs
Seeks to amend No. 64/2023-Customs, dated the 7th december, 2023 in order to allow duty free imports of yellow peas with bill of lading issued on or before 30.06.2024

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