What changed
RBI has decided that all inter-bank OTC foreign exchange derivatives must be reported on a platform built by CCIL. Additionally, select trades between Category-I AD banks/market makers and their clients in OTC forex and interest rate derivatives will also be reported on the same platform, subject to a mutually agreed confidentiality protocol. This extends the existing reporting mandate for rupee FRAs and IRS (introduced in August 2007) to cover a broader set of OTC derivatives.
What it means for you
Banks and PDs must now prepare for a unified reporting mechanism for OTC forex and interest rate derivatives, which will enhance market transparency and regulatory oversight. The involvement of CCIL and market bodies (FEDAI, FIMMDA, PDAI) in developing confidentiality protocols means banks will need to align their systems and processes with the new platform. This could increase operational costs initially but reduce fragmentation in reporting over time.
What you must do
- Coordinate with CCIL to understand technology upgrades and timelines for the new reporting platform.
- Engage with FEDAI, FIMMDA, and PDAI to finalise confidentiality protocols for client trade reporting.
- Review and update internal systems to ensure seamless reporting of all inter-bank OTC forex derivatives and applicable client trades.
- Prepare for a phased rollout by monitoring CCIL's milestones and the go-live date to be announced.
Who it affects
Category-I Authorised Dealer Banks, Primary Dealers, Clearing Corporation of India Limited (CCIL), FEDAI, FIMMDA, PDAI
What trades are covered under this new reporting mandate?
All inter-bank OTC foreign exchange derivatives must be reported. Also, select trades in OTC forex and interest rate derivatives between Category-I AD banks/market makers and their clients will be reported, subject to a confidentiality protocol.
When will this reporting requirement take effect?
The exact date will be advised later by RBI. CCIL will inform banks and PDs about technology upgrades and milestones, and reporting is expected to commence seamlessly from that date.
Who is responsible for developing the confidentiality protocol for client trades?
Market representative bodies—FEDAI, FIMMDA, and PDAI—are tasked with assisting CCIL in developing the confidentiality protocol for client trade reporting.