Risk management for FX derivatives: rules require documented underlying exposures, prudential safeguards and mandatory reporting. Master Circular consolidates rules on Risk Management and Inter-Bank Dealings, specifying permissible foreign exchange and commodity hedging products, operational safeguards tying derivatives to verified underlying exposures, eligibility and prudential criteria for market-makers and users, prohibitions on certain leveraged and exotic structures, documentation and auditor certification requirements, conditions on cancellation/rebooking and detailed reporting obligations by Authorised Dealers to the Reserve Bank.
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Provisions expressly mentioned in the judgment/order text.
Risk management for FX derivatives: rules require documented underlying exposures, prudential safeguards and mandatory reporting.
Master Circular consolidates rules on Risk Management and Inter-Bank Dealings, specifying permissible foreign exchange and commodity hedging products, operational safeguards tying derivatives to verified underlying exposures, eligibility and prudential criteria for market-makers and users, prohibitions on certain leveraged and exotic structures, documentation and auditor certification requirements, conditions on cancellation/rebooking and detailed reporting obligations by Authorised Dealers to the Reserve Bank.
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