India calls for OTC close-out netting provisions

Author: | Published: 11 Jul 2011

India's lawyers have called for close-out netting provisions in India's over-the-counter (OTC) derivatives market.

AZB & Partners associate, Sayak Maity told IFLR that legal certainty was needed on the netting of counterparties' exposures in insolvency cases.

Distinct bankruptcy legislation for India's private sector and government entities had created ambiguity and increased risk when dealing with government organisations and state-owned banks, he said.

Independent netting legislation or amendments to bankruptcy laws would address market uncertainties, and foster market growth, said an Asia-based fixed income derivatives bankers' counsel.

Enforcing close-out netting is the first stage of...