What changed
RBI mandated that all inter-bank OTC foreign exchange derivatives—specifically USD-INR forwards, FX swaps, and FCY-INR options—be reported on a platform developed by CCIL, effective July 9, 2012. Reporting must be done in hourly batches within 30 minutes after each hour ends. Outstanding trades as of the go-live date must be submitted to CCIL by July 31, 2012.
What it means for you
Banks now have a strict, time-bound reporting obligation for these OTC FX derivatives, increasing operational discipline and transparency. The phased rollout suggests that client trades and other derivative types will eventually be covered, so early compliance with this initial phase is critical. Non-reporting or delays could attract regulatory scrutiny.
What you must do
- Complete CCIL membership and pre-commencement formalities well before July 9, 2012.
- Set up systems to report inter-bank USD-INR forwards, FX swaps, and FCY-INR options in hourly batches within 30 minutes of each hour.
- Compile and report all outstanding inter-bank OTC USD-INR forwards, FX swaps, and FCY-INR options as on July 9, 2012, to CCIL by July 31, 2012.
- Note that trades with your own overseas branches are exempt from reporting.
- Prepare for future phases that will extend reporting to client trades and other OTC FX and interest rate derivatives.
Who it affects
All Category-I Authorised Dealer Banks, Primary Dealers
What trades are covered under this reporting requirement?
The initial phase covers inter-bank OTC USD-INR forwards, FX swaps, and FCY-INR options. Trades with a bank's own overseas branches are excluded.
What is the reporting frequency and deadline?
Trades must be reported in hourly batches within 30 minutes after the completion of each hour. For example, trades between 9-10 AM must be reported by 10:30 AM.
When do we need to report outstanding trades?
All outstanding inter-bank OTC USD-INR forwards, FX swaps, and FCY-INR options as on July 9, 2012, must be reported to CCIL by July 31, 2012.