RBI report on derivatives trading to be out soon

Mumbai: The Reserve Bank of India is engaged in bringing about harmonisation between the over-the-counter (OTC) and exchange-traded interest rate derivatives markets, said a senior central banker.

"We are in advanced stages of preparing a report, which looks at harmonisation of regulations for OTC and exchange traded products in the derivatives segment," said Mr G. Padmanabhan, RBI Regional Director, Andhra Pradesh, addressing a gathering of senior bankers at a seminar on derivatives organised by the Indian Banks' Association and the Fixed Income Money Market and Derivatives Association of India here today.

Mr Padmanabhan declined to throw light on exactly what these issues were, but it is known from the market that these possibly pertain to settlement issues. As of now, settlement on the OTC market is bilateral which may be routed through Clearing Corporation of India to match the settlement practice of the exchange-traded product, said a chief dealer in a bond house.
The draft report will also have a checklist for banks to fulfil before they are granted permission to trade and act as market makers in this segment.

The report would be ready in a couple of weeks, said Mr Padmanabhan.