RBI proposes draft novation norms. Interestingly, excludes novation of OTC derivative pursuant to scheme of merger/demerger/amalgamation, approved or confirmed by the competent authority under the Companies Act, 2013 or any other law.
Key points:
- Exchange of MTM: The requirement to exchange MTM upfront is absent.
- Reporting: Market-makers to report OTC derivative novation details to CCIL’s Trade Repository.
- Regulatory update: These guidelines replace the older framework from 2013, reflecting evolving market dynamics.
- Standard Agreements: FIMMDA and FEDAI to develop standard novation agreements.
Comments on the Draft Directions can be sent by 1st August 2025.
For further details, please see:
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