Mumbai: The Clearing Corp. of India, which runs the settlement of trades in the nation’s bond, currency and money markets, will introduce a computer-based facility for reporting deals in local interest-rate derivatives.
The Mumbai-based company, which was set up in 2001 by domestic banks, primary dealers and insurance companies, will begin operating the new service on 30 August, the Reserve Bank of India (RBI) said in a statement in Mumbai.
The new facility will provide information about trades in interest-rate swaps and forward-rate agreements, which are derivatives used to guard against rate fluctuations. Banks and primary dealers must report each of the trades to the Clearing Corp. within 30 minutes of completing the transaction, the central bank said.
Banks and primary dealers must disclose all details of their outstanding swap and forward-rate agreement trades to the Clearing Corp. facility by 15 September, the monetary authority said.
Trades to be reported must be priced using benchmarks such as the Mumbai interbank offered rate, the Mumbai interbank forward offered rate or the one-year government bond yield, Clearing Corp. said in a statement on its website.
Transactions of interest-rate derivatives have been less reported than those in the bond and currency markets since RBI allowed trading in swaps to begin in 1999.