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FIMMDA Accreditation Required for OTC IRD Brokers

Current · Source: Reserve Bank of India · RBI/2010-11/429 · issued 16 Mar 2011 · ~1 min read
Quick answerBanks and financial institutions must ensure that any broker used for OTC rupee interest rate derivatives is accredited by FIMMDA, as per the 2011 circular superseding the 2007 guidelines.
The rule, in the simplest words
How it plays out — a real example

Rahul, a credit & lending officer in Indore, ensures that the brokers his bank uses for OTC rupee interest rate derivatives are FIMMDA-accredited before entering into any contracts. He also updates the bank's internal policies and approved broker lists to reflect the new accreditation requirement, and trains his colleagues on the importance of using accredited brokers.

What changed

RBI now requires that if banks and financial institutions enter into OTC interest rate derivatives through brokers, those brokers must be FIMMDA-accredited. This supplements the 2007 comprehensive derivatives guidelines.

What it means for you

Banks and lenders must update their approved broker panels to include only FIMMDA-accredited entities for OTC IRD (over-the-counter interest rate derivative) deals.

What you must do

Who it affects

All scheduled commercial banks (excluding RRBs and LABs), All India term-lending and refinancing institutions, Primary dealers, Financial institutions dealing in OTC rupee interest rate derivatives

❓ Common questions

Does this circular apply to exchange-traded interest rate derivatives?

The source does not address exchange-traded instruments; it specifically covers OTC rupee interest rate derivatives.

What happens if we use a broker not accredited by FIMMDA?

The source advises that brokers must be FIMMDA-accredited but does not specify consequences.

Is this circular still in effect?

The source notes that these directions have been superseded by Master Direction – Reserve Bank of India (Rupee Interest Rate Derivatives) Directions, 2025.

📜 Read the original circular — full text as issued by RBI
RBI/2010-11/429 DBOD.No.BP.BC.82/21.04.157/2010-11 March 16, 2011 The Chairman and Managing Directors/ Chief Executive Officers of All Scheduled Commercial Banks (excluding RRBs and LABs) & All India Term-Lending & Refinancing Institutions Dear Sir, Accreditation of brokers in OTC Interest Rate Derivatives Market Please refer to the circular DBOD.No.BP.BC.86/21.04.157/2006-07 dated April 20, 2007 on Comprehensive Guidelines on Derivatives, whereby banks, primary dealers and financial institutions have been permitted to undertake rupee interest rate derivatives transactions. It is advised that if banks and financial institutions decide to enter into OTC interest rate derivatives contracts through brokers, they should ensure that these brokers are accredited by the FIMMDA. Yours faithfully, (B. Mahapatra) Chief General Manager-in-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2010-11/429 · issued 16 Mar 2011. The plain-English explanation above is BankPulse’s own independent summary.
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Worked example & action-note template

Example: if you are a Compliance officer at a bank this circular applies to (All scheduled commercial banks (excluding RRBs and LABs), All India term-lending and refinancing institutions, Primary dealers, Financial institutions dealing in OTC rupee interest rate derivatives), your first concrete step on “FIMMDA Accreditation Required for OTC IRD Brokers” is: “Verify that all brokers used for OTC rupee interest rate derivatives are currently accredited by FIMMDA.” (RBI issued this 16 Mar 2011).

  1. Circular: RBI/2010-11/429 -- FIMMDA Accreditation Required for OTC IRD Brokers
  2. Issued: 16 Mar 2011
  3. Action required: Verify that all brokers used for OTC rupee interest rate derivatives are currently accredited by FIMMDA.
  4. Action required: Update internal policies and approved broker lists to reflect the FIMMDA accreditation requirement.
  5. Action required: Train treasury and derivatives desk staff on the new accreditation mandate.
  6. Owner: ____________ Target date: ____________
  7. Board/committee approval needed? Y / N
  8. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=6288&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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