Bothe SEBI and IRDA are likely to permit their regulated entities to participate in CDS as users soon. These are not major operational issues and should not deter market participants from undertaking trades. Stringent capital adequacy guidelines are also being termed as stumbling block.
Since CDS  6  BIS central bankers’ speeches  is a complex derivative product and downside risk is very high, Reserve Bank intends to follow a cautious and gradual approach in the nascent stage of development of the market. As for as capital adequacy guidelines are concerned, Reserve Bank has broadly followed Basel norms.