RBI invites feedback on Draft Rupee Interest Rate Derivatives (Reserve Bank) Directions, 2020

Sep 16, 2020 | by Avantis RegTech Legal Research Team


Finance & Taxation Compliance

The Reserve Bank of India (RBI) on September 15, 2020 has issued a press release looking for feedbacks on the Draft Rupee Interest Rate Derivatives (Reserve Bank) Directions, 2020. The proposed Draft Rupee Interest Rate Derivatives (Reserve Bank) Directions, 2020 are aimed at encouraging higher non-resident participation, enhance the role of domestic market makers in the offshore market, improve transparency and achieve better regulatory oversight. These directions will be applicable to Rupee interest rate derivatives transactions undertaken in Over-the-Counter (OTC) markets and on recognized stock exchanges in India.

Under the directions, the following persons would be eligible to participate in Rupee Interest Rate Derivatives (IRDs) markets:

• A person resident in India;

• A non-resident by way of a ‘back-to-back’ arrangement through a foreign counterpart of the market-maker in India.

• A parent company or any group company whether a person resident in India or a non-resident, can transact in Rupee IRDs on behalf of their group companies or wholly owned subsidiaries.

The comments on the Draft Directions are invited from banks, market participants and other interested parties by October 15, 2020. Feedback on the Draft Directions may be forwarded to Chief General Manager, Reserve Bank of India, Financial Markets Regulation Department, 9th Floor, Central Office Building, Shahid Bhagat Singh Marg. Fort, Mumbai- 400001 or on email with subject line “Feedback on Draft Rupee Interest Rate Derivatives (Reserve Bank) Directions, 2020”.

[Notification No. FMRD.DIRD.XX /2020]


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