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27
ANNEXURE 3: CURRENT STATUS ON OTC DERIVATIVE PRODUCTS
Requirement
(G-20)
Products
Trade
Repository
(for both
Interbank
And client
Trades)
Standardisation
Central
Clearing
(CCP)
Electronic
Trading
Platform
Higher
capital
/Margin
for
Non-
centrally
Clearing
OTC
Derivative
trades
Forex OTC
Derivatives
Forex
Forward
Available
for both
interbank
and client
trades
(FCY-INR
& FCY-
FCY).
Not available as
majority of
interbank trades
driven by
customized client
trades.
Guarantee
d Central
clearing
available.
RBI has
not
mandated
it.
No
exclusive
platform
available.
Can be
traded on
FX-
SWAP.
No
regulatory
Requireme-
nt
Forex
Swap
Available
for both
interbank
and client
trades
(FCY-INR
& FCY-
FCY).
Not available as
majority of
interbank trades
driven by
customized client
trades.
Guarantee
d Central
clearing
available.
RBI has
not
mandated
it.
Can be
traded on
CCIL and
Reuters trading
platform.
Majority of
trades done
through
brokers.
No
regulatory
Requireme-
nt
Forex
Option
Available
for both
interbank
and client
trades
(FCY-INR
& FCY-
FCY).
Not available as
majority of
interbank trades
driven by
customized client
trades.
Central
clearing
not
available.
Not
available.
No
regulatory
Requireme-
nt
Currency Swap
Available
for both
interbank
and client
trades
(FCY
-INR &
FCY-FCY).
Not available. Not
available.
Not
available.
No
regulatory
Requireme-
nt
(Source: Implementation group on OTC Derivatives market reforms, RBI)
28
ANNEXURE 4: SUMMARY OF RESPONSES
1. Is the position limits without underlying exposure low?
2. Should trading hours be extended beyond current timings?
29
3. Do you prefer introduction of Deliverable contracts in the Exchange?
4. Do you prefer introduction of Non-INR cross currency contracts (like EUR-USD, GBP-
USD) in the exchange?
30
5. Should margin requirements be relaxed?
6. Is there enough awareness among market participants about ETCD products?
31
7. Can introduction of contract of different lot sizes improve liquidity in the exchange?
8. Other Responses:
1. Some of the bankers believe that the cost of trading is increasing in the exchange
and the stamp duty charges can be reduced and rationalised across the country.
2. NRIs are significant participants to foreign exchange flows of our country, so
regulators can consider allowing them to ETCD in future.
3. The registration process for FPIs (particularly category III) should me made
simpler and all the requirement and rules must be made available clear from a
single reliable source.
4. International standards in reporting of currency derivatives can be adapted to
Indian markets and these advancements are expected by the FPIs.
5. All the requirements of G20 reform program for OTC derivatives should be made
mandatory by RBI
32
BIBLIOGRAPHY
1. RBIs master circular on Risk Management and Inter-bank dealings.
2. SEBI circulars for Exchange Traded Currency Derivatives segment.
3. RBI - SEBI standing technical committee report on Exchange traded currency futures.
4. BIS policy framework for non-centrally cleared derivatives as agreed by Basel
committee on banking supervision.
5. Non Deliverable Foreign Exchange Forward Market: An Overview by Sangita Misra
and Harendra Behera - Reserve Bank of India Occasional Papers.
6. NISM workbook for certification on Currency Derivatives.
7. FICCIs banking and finance 3 years of currency derivatives segment, January 2012.
8. Currency Futures Trading In India by Bh.L.Mohanraju, K.Neelima and B.Krishna
Prasad - Asian Journal of Multidisciplinary Studies, October 2014.
9. Over-the-counter derivative markets in India, Issues and perspectives by Shyamala
Gopinath, Deputy Governor, RBI.
10. Bank for International Settlements, Triennial Central Bank Survey, Global foreign
exchange market turnover in 2013.
33
CURRICULUM VITAE NAME : E. MARK LINEKAR
DATE OF BIRTH : 28 July, 1990
EDUCATIONAL QUALIFICATION : B.E
BRANCH : Electrical and Electronics
INSTITUTTION : Coimbatore Institute of Technology
WORK EXPERIENCE : 24 months at KEC International, KSA.