India’s venue-based FX dealing systems, FX-Clear and FX-Swap platforms are set for a remake. Reportedly, the platforms will operate with Clearing Corporation of India (CCIL), as market makers for trades placed and completed in the order matching system. Particularly, this is a development from the previous model as India to launch new FX clearing system.
FX-Clear is a FX dealing system, pioneered in India back on August 7, 2003. Which was used to offer dual order matching and negotiation modes for dealing, while the FX-Swap dealing system is an anonymous dealing system where the parties transacting in the original counter-party trades will be disclosed only after the trade activities have been concluded.
A senior treasury official said in an interview with Business Insider that; “Now banks will not be required to have bilateral exposure limits with other banks with whom they are trading. Previously banks were required to have exposure limits with whom they were trading and for these exposure limits, banks had to keep capital too”.
The new system is scheduled to go live on April 6, as it is expected to operate in dual operation payment versus payment in the dollar/rupee settlement segment. Beneficially, this will allow members to trade on the platforms without any bilateral limits with various counter-parties.