RBI/2010-11/542
IDMD.PCD.No. 5053 /14.03.04/2010-11

May 23, 2011

All Market Participants

Dear Sir

Guidelines on Credit Default Swaps (CDS) for Corporate Bonds

As indicated in paragraph 113 of the Second Quarter Review of Monetary Policy for year 2009-10, an Internal Group was constituted by the Reserve Bank to finalise the operational framework for the introduction of plain vanilla OTC single-name CDS for corporate bonds in India.

2.         Draft guidelines on CDS based on the recommendations of the Group were placed on the RBI website on February 23, 2011 and were open for comments from all concerned.

3.         Comments were received from a wide spectrum of banks, PDs and other market participants. The guidelines have been suitably revised in the light of the feedback received and are furnished in the Annex.

4.         The guidelines would become effective from October 24, 2011.

Yours faithfully,