What changed
RBI mandated that all commercial banks and select all-India financial institutions report their secondary market OTC corporate bond transactions on FIMMDA's reporting platform starting September 1, 2007. FIMMDA will aggregate trades from its own platform as well as from BSE and NSE, adding value to the data.
What it means for you
Banks and AIFIs must now ensure their OTC corporate bond trades are reported to FIMMDA, which will centralize and enhance market transparency. This aligns with the Patil Committee's recommendations to develop the corporate bond market. Banks should coordinate with FIMMDA for operational guidelines and mock reporting sessions before the go-live date.
What you must do
- Contact FIMMDA directly to participate in mock reporting sessions before September 1, 2007.
- Prepare your systems and processes to report all secondary market OTC corporate bond transactions to FIMMDA's platform from September 1, 2007.
- Review and implement the detailed operational guidelines to be issued by FIMMDA for reporting.
- Ensure your treasury and compliance teams are aware of the new reporting obligation.
Who it affects
All commercial banks (except RRBs and LABs), All India Financial Institutions (NHB, NABARD, EXIM Bank, SIDBI, TFCI Ltd., IFCI Ltd., IIBI Ltd.)
What transactions must be reported on FIMMDA's platform?
All secondary market transactions in corporate bonds conducted in the OTC market by commercial banks and select AIFIs must be reported.
When does this reporting requirement take effect?
The requirement becomes effective from September 1, 2007. FIMMDA's platform is currently under trial run and will go live on that date.
Who should we contact for operational details?
FIMMDA will issue detailed operational guidelines. Banks and AIFIs should approach FIMMDA directly for participation in mock reporting sessions and further guidance.