Economy News Notes:

Not surprisingly, the Securities and Exchange Board of India (SEBI) has decided to hold the whip to reign in market intermediaries who outsource certain of their jobs.
Keen to ensure that the intermediaries don't court assorted risks associated with outsourcing, the regulator is also out to fix responsibility for any outsourcing-related negative fall-outs. It has now come out with norms for outsourcing activities by the intermediaries.
For one, the regulator has made it clear that intermediaries shall not outsource their core business activities and compliance functions.
It has also directed the intermediaries to report ‘suspicious transactions' in respect of activities carried out by third parties to the financial intelligence unit or any other competent authority.
Other includes:
To have a comprehensive policy on outsourcing and make their boards responsible for such a policy.
To put in place a outsourcing risk management programme.
To ensure that outsourcing does not diminish their ability to fulfil their obligations to customers and regulators.
To ensure that outsourcing does not impede effective supervision by the regulators.
To do right due diligence in selecting the third part and monitoring its performance.
To ensure that such outsourcing relationship are defined by written contracts.
To ensure that confidential information is protected.

In the wake of steady weakening of the rupee against the dollar, the Reserve Bank of India has stepped in to announce certain non-direct intervention measures.
As a consequence, re-booking cancelled forward contracts, whatever the type and tenor of the underlying exposure, by resident and foreign institutional investors is disallowed.
Hitherto, forward contracts booked to hedge current account transactions regardless of the tenor were allowed to be cancelled and rebooked.
The apex bank has now made it clear that forward contracts once cancelled cannot be rebooked.
The RBI has also modified the currency risk hedging norms for importers and exporters. Importers were hitherto allowed to hedge currency risk on the basis of a declaration of an exposure based on past performance up to the average of the previous three financial years' actual import/export turnover or the previous year's import/export turnover, whichever is higher.
The RBI has also reduced the net overnight open position limit (NOOPL) of authorised dealers across the board. The move ostensibly is intended to prevent speculations in the foreign exchange market.