They would also be permitted as market-makers subject to their having strong financials and risk management capabilities as prescribed by SEBI and as and when permitted by the SEBI. It is expected that Mutual Funds’ participation will provide momentum to the CDS market.
Most of these restrictions were adopted in the 1970s, when investors from oil-producing countries were looking for places to invest their petro-dollars and began buying shares in German companies. Although these restrictions limit the power of any large blockholder, including banks, the restrictions rarely apply to the proxy votes that banks may cast on behalf of dispersed shareholders.