RBI likely to give ground on new derivatives rules

An industry-wide outcry sparked by the Reserve Bank of India's (RBI) draft derivatives rules seems to have persuaded the regulator to drop its most controversial plans. But the RBI looks set to ignore other complaints, notably those about the restructuring of derivatives deals and the policing of customer activity.

The draft rules, published on December 12, would have completely shut down the active onshore markets for swaptions and short-term currency hedging (Risk January 2007, pages 90-92)