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OTC Derivatives Market in India: Recent Regulatory Initiatives and Open Issues for Market Stability and Development

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  • Dayanand Arora
  • Francis Xavier Rathinam

Abstract

The paper seeks to prove the point that the Indian OTC derivatives markets, unlike many other jurisdictions, are well regulated. Only contracts where one party to the contract is an RBI regulated entity are considered legally valid in India. A good reporting system and a post-trade clearing and settlement system, through a centralised counter party, has ensured good surveillance of the systemic risks in the Indian OTC market. [ICRIER WP No. 248].

Suggested Citation

  • Dayanand Arora & Francis Xavier Rathinam, 2010. "OTC Derivatives Market in India: Recent Regulatory Initiatives and Open Issues for Market Stability and Development," Working Papers id:2479, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:2479
    Note: Institutional Papers
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    References listed on IDEAS

    as
    1. Winfried Rudek, 2009. "The possibilities and limitations of derivatives statistics collected by central banks," IFC Bulletins chapters, in: Bank for International Settlements (ed.), Proceedings of the IFC Conference on "Measuring financial innovation and its impact", Basel, 26-27 August 2008, volume 31, pages 44-48, Bank for International Settlements.
    2. Goderis, B.V.G. & Marsh, I. & Vall Castello, J. & Wagner, W.B., 2006. "Bank Behavior with Access to Credit Risk Transfer Markets," Other publications TiSEM 75d3b9f4-be84-499d-b1a3-8, Tilburg University, School of Economics and Management.
    3. Allen, Franklin & Carletti, Elena, 2006. "Credit risk transfer and contagion," Journal of Monetary Economics, Elsevier, vol. 53(1), pages 89-111, January.
    4. Ashima Goyal & R Ayyappan Nair & Amaresh Samantaraya, 2009. "Monetary Policy, Forex Markets and Feedback Under Uncertainity in an Opening Economy," Working Papers id:2208, eSocialSciences.
    5. Stephen G Cecchetti & Jacob Gyntelberg & Marc Hollanders, 2009. "Central counterparties for over-the-counter derivatives," BIS Quarterly Review, Bank for International Settlements, September.
    6. Unknown, 2005. "Forward," 2005 Conference: Slovenia in the EU - Challenges for Agriculture, Food Science and Rural Affairs, November 10-11, 2005, Moravske Toplice, Slovenia 183804, Slovenian Association of Agricultural Economists (DAES).
    7. Shah, Ajay & Thomas, Susan & Gorham, Michael, 2008. "Indian Financial Markets," Elsevier Monographs, Elsevier, edition 1, number 9780123742513.
    8. Reserve Bank of India, 2007. "Annual Policy Statement for the Year 2007-08," Working Papers id:957, eSocialSciences.
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    Citations

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    Cited by:

    1. Parthasarathi Shome, 2011. "Financial Transactions Taxes," Working Papers id:3930, eSocialSciences.
    2. repec:ind:icrier:254 is not listed on IDEAS
    3. Shruthi B. C. & N. Suresh, 2022. "Indian Derivatives Market Evolution and Challenge," Papers 2207.13123, arXiv.org.
    4. Silva, Walmir & Kimura, Herbert & Sobreiro, Vinicius Amorim, 2017. "An analysis of the literature on systemic financial risk: A survey," Journal of Financial Stability, Elsevier, vol. 28(C), pages 91-114.

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    More about this item

    Keywords

    Indian; OTC market derivatives; India; post-trade; regulated; RBI; stability; development; Finanacial institutions; regulations; derivatives; over the counter; government policy; research and development; R&D; currency; balance sheet;
    All these keywords.

    JEL classification:

    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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