In response to the financial crisis that began in 2007, the G-20 initiated a series of reforms designed to strengthen the regulation and oversight of the financial system and tasked the Financial Stability Board (FSB) with coordinating the reforms and assessing their implementation. An important aspect of these reforms is a commitment to enhance the regulation of Over the Counter (OTC) derivatives market so as to improve transparency, mitigate systemic risk and protect against market abuse. The reforms agenda consists of standardization, central clearing, exchange or electronic platform trading, margining and reporting of OTC derivatives transactions to trade repositories.
In India, the OTC derivative products were introduced in a phased manner, particularly keeping in view the hedging needs of the real sector. As Reserve Bank of India (RBI) has initiated steps for adoption of the G-20 / FSB reforms, reasonable progress has been made in implementing the OTC derivative reform measures in India. In order to guide the process of implementation of the key reform measures being undertaken by FSB, an Implementation Group on OTC Derivatives Market Reforms was constituted on the directions of the Sub Committee of the Financial Stability and Development Council (FSDC). The Group was chaired by Shri R. Gandhi, Executive Director, RBI with representatives from RBI and the market participants. The Group has made a gap analysis with regard to various OTC derivative products in India and has suggested tentative timelines for reform implementation. The report is being put in public domain for wider information (www.rbi.org.in).
RBI will actively engage with market participants and other stake holders to ensure speedier implementation of the recommendations of the Group.
Samruddhi Chaudhary
Assistant Manager
Press Release : 2013-2014/1762
