The focus areas are standardization, central clearing, shifting all trading to exchanges or electronic platforms and reporting of trades to trade repositories. The FSB is monitoring the implementation of these reforms to ensure consistent and time bound implementation across all G-20 countries. How have we, in India, responded? In India, the OTC derivative markets are relatively small and have developed within a regulated framework.
As per the RBI Act, the validity of any OTC derivative contract is contingent on at least one of the parties to the transaction being a regulated entity. We introduced the OTC derivative products in a phased manner consistent with the hedging needs of the real sector.