REGULATORY
FRAMEWORK
OF THE INDIAN
MONEY
MARKET
RESERVE BANK OF INDIA
Refer to the assignment
Qualitative and Quantitative Instruments of RBI
FIMMDA
Fixed Income Money Market and Derivatives Associations of
India (FIMMDA), is an association of Scheduled Commercial
Banks, Primary Dealers, Financial Institutions and Insurance
Companies.
It was incorporated as a company under Section 25 of the
Companies Act 1956 on June 3 r d , 1998.
FIMMDA is a voluntary market body for all bond, money and
derivatives markets.
It has members representing all major institutional segments
of the market. The membership includes Nationalised Banks
such as SBI, its associate banks, other nationalised banks;
Private Sector Banks such as ICICI Bank, HDFC Bank etc.;
Foreign Banks such as Citibank, ABN Amro etc.; Financial
Institutions such as EXIM Bank, NABARD etc.; Insurance
Companies like LIC, ICICI Prudential etc. and all Primary
Dealers.
FIMMDA represents market participants and aids the
development of the bond, money and derivative market.
It acts as an interface with the regulators on various
issues that impact the functioning of these markets.
FIMMDA also undertakes developmental activities such
as Introduction of benchmark rates and new derivatives
instruments etc.
FIMMDA releases rates of various Govt securities that are
used by market participants for valuation purposes.
FIMMDA also plays a constructive role in the evolution of
best market practices by its members so that the market
as a whole operates transparently as well as efficiently.
OBJECTIVES
1. To function as the principal interface with the regulator on
various issues that impact the functioning of these markets.
2. To undertake developmental activities such as introduction of
benchmark rates and new derivatives instruments.
3. To provide training and development support to dealers and
support personnel at member institutions.
4. To adopt / develop international standards practices and a
code of conduct in the above fields of activities.
5. To devise standardized best market practices.
6. To function as an arbitrator for disputes between member
institutions.
7. To develop standardized sets of documentations .
8. To assume any other relevant role facilitating smooth and
orderly functioning of the said markets.
The scope of FIMMDA includes the following : Call
Money/ Notice Money, Term Money, Bill
Rediscounting, Commercial Papers, Certificate of
Deposit, Dated Govt Securities, Treasury Bill, Bond
Debentures etc.
It has recommended many provisions, rules,
guidelines as well as regulations for all the above
mentioned instruments. However incase of any other
law or regulations or guidelines laid down by any
other statutory authority in India like the RBI, the
latter shall prevail.
FOREIGN EXCHANGE
DEALERS ASSOCIATION
OF INDIA (FEDAI)
FEDAI
Foreign Exchange dealers Association of India (FEDAI)
was set up in 1958 as an association of banks dealing in
foreign exchange in India (called Authorized Dealers) as
a self regulatory body and is incorporated under section
25 of the Indian Companies Act 1956.
Its major activities include framing of rules governing the
conduct of inter bank foreign exchange business among
the banks vis a vis public and liaison with the RBI for
reforms and development of Forex market for the
conduct of the foreign exchange business for AD’s.
Recently some of the functions are as follows :
Guidelines and rules for Forex Business
Training of bank personnel in the areas of foreign
exchange business.
Accreditation of Forex business
Advising and assisting member banks in settling issues,
matters in their dealings.
Represent member banks on Govt/RBI/other bodies
Announcement of daily and periodical rates to member
banks
FEDAI plays a catalytic role for the smooth functioning of
the markets thru closer coordination with RBI, FIMMDA,
Forex Associations of India and various market
participants.
FEDAI rules were prepared taking care of the interest of
time. However to boost foreign trade to and fro India, it
became imperative by FEDAI to review the rules and
guidelines. FEDAI has taken due care of the interest of
both importers and exporters while revising rules and
guidelines.
It carries out periodic review of the rules and incase of
need amends the rules.
NEGOTIATED DEALING
SYSTEM ORDER
MATCHING (NDS-OM)
Refer to text book
THANK YOU
