These stages very often overlap and small developing countries seldom move beyond the state of primary government bond issuance and illiquid equity markets.
Through this transition period, the overall regulatory approach towards OTC derivative markets is as important as addressing the transactional aspects. In India, unlike the developed financial markets where OTC derivative markets epitomised complex, unregulated financial innovations that grew exponentially over the last two decades, the OTC derivative markets have evolved within a regulated space.