Regulatory Alerts2026-06-25
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Master Direction – Reserve Bank of India (Credit Derivatives) Directions, 2026
The Reserve Bank of India establishes regulatory frameworks for Credit Default Swaps (CDS) and Total Return Swaps (TRS) in Over-the-Counter and exchange-traded markets, effective June 25, 2026. Eligible market-makers are restricted to Scheduled Commercial Banks (excluding specific small banks), Standalone Primary Dealers, and upper/middle-layer NBFCs, while non-retail user classification requires entities to meet minimum net worth or turnover thresholds. Foreign Portfolio Investors face a 5 percent limit on the notional amount of CDS protection sold relative to outstanding corporate bonds, and hedging transactions are strictly capped by the face value and maturity of the underlying reference assets.
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