The Reserve Bank of India today released Draft Variation Margin (Reserve Bank) Directions, 2020. Comments on the draft directions are invited from banks, market participants and other interested parties by October 15, 2020.

Feedback on the draft directions may be forwarded to:

The Chief General Manager, Reserve Bank of India
Financial Markets Regulation Department
9th Floor, Central Office Building
Shahid Bhagat Singh Marg, Fort
Mumbai – 400001

Or by email with subject line “Feedback on Draft Variation Margin (Reserve Bank) Directions, 2020”.

Background

Reserve Bank of India in its Statement on Developmental and Regulatory Policies dated February 6, 2020 announced that RBI will issue the directions regarding exchange of variation margin for non-centrally cleared derivatives (NCCDs), following the G-20 recommendations, and with a view to improve safety of settlement of over-the-counter (OTC) derivatives that are not centrally cleared.

Accordingly, a draft Variation Margin (Reserve Bank) Directions, 2020 is being issued for feedback.

(Yogesh Dayal)     
Chief General Manager

Variation margin requirement for non-centrally cleared derivatives proposed to enhance OTC settlement safety and solicit stakeholder comments. Release of draft Variation Margin (Reserve Bank) Directions, 2020 proposes requiring the exchange of variation margin for non-centrally cleared derivatives (NCCDs) to implement G-20 recommendations and improve the safety of settlement for OTC derivatives. The Reserve Bank seeks feedback from banks, market participants and other interested parties by the specified deadline and provides channels for submission of comments as part of a consultative process prior to finalisation.