For those eagerly awaiting RBI’s Credit
Default Swap Guidelines for Corporate Bonds (hereinafter referred to as CDS) to
come into force, there is some unwelcome news in the front, since the apex bank
has seen it fit to defer it by another month to the end of November, 2011 (see
RBI Circular RBI/2011-2012/228IDMD.PCD.No. 12/14.03.04/2011-12).
The CDS had been agreed upon in its final form back in May, 2011 and was
earlier supposed to operate from October 24, 2011. However, given the
complexities of the documentation and operational processes involved, as well
as the necessity of putting a functional institutional framework in place, the
RBI has decided to give the stakeholders like mutual funds and insurance
companies a bit more time to familiarize themselves with the guidelines. The
exact revised date of implementation of CDS has not yet been declared.
