What changed
RBI mandated reporting of interbank and client OTC currency swaps, FCY FRA/IRS, and client INR FRA/IRS on the CCIL platform from December 30, 2013. A confidentiality protocol has been finalized with market bodies. Client INR FRA/IRS reporting to RBI will be phased out once CCIL reporting stabilizes.
What it means for you
Banks and PDs must now report a broader set of OTC derivative trades to CCIL, increasing operational load and compliance costs. The USD 1 million threshold for client currency swaps and FCY FRA/IRS means smaller trades are exempt, but all client INR FRA/IRS must be reported regardless of size. This move enhances market transparency and regulatory oversight.
What you must do
- Ensure your systems can report interbank and client OTC currency swaps, FCY FRA/IRS, and client INR FRA/IRS to CCIL by Dec 30, 2013.
- Report interbank currency swaps and FCY FRA/IRS on trade date before CCIL platform closure; overseas counterparty trades in currency swaps (not involving INR) and FCY FRA/IRS after 5 PM can be reported by 10 AM next business day.
- Report client currency swaps, FCY FRA/IRS, and INR FRA/IRS before 12 noon of the following business day.
- Apply the USD 1 million threshold for client currency swaps and FCY FRA/IRS using FEDAI revaluation rates; report all client INR FRA/IRS without threshold.
- Report all outstanding interbank currency swaps, FCY FRA/IRS, and client INR FRA/IRS as of Dec 30, 2013 to CCIL by Jan 31, 2014.
Who it affects
Category-I Authorised Dealer Banks, Primary Dealers, CCIL, Clients (resident entities, NRIs, FDI, FII, non-resident exporters/importers)
What is the threshold for reporting client currency swaps and FCY FRA/IRS?
The threshold is USD 1 million or equivalent in other currencies, applied to the base currency at origination using the CCIL currency matrix. Trades at or above this threshold must be reported; post-trade events are exempt from the threshold.
Do we need to report outstanding trades entered before December 30, 2013?
For client currency swaps and FCY FRA/IRS, reporting is prospective only—no need to report outstanding trades. However, all outstanding interbank currency swaps, FCY FRA/IRS, and client INR FRA/IRS as of Dec 30, 2013 must be reported to CCIL by January 31, 2014.
Will client INR FRA/IRS reporting to RBI continue?
No, the existing reporting arrangement for client INR FRA/IRS to RBI will be dispensed with after the CCIL reporting arrangement stabilizes. Until then, banks must continue both reporting streams.