Extended Forex Market Timings Demand | RBI On Move to Create a New Panel
As per the media reports, RBI has mentioned the demand has been put forth to extend the market timings for the segments including currency futures as well as the counter forex market gaining currency. This Wednesday, the RBI officials confirmed in front of media that they are planning to set up a committee to review the same.
Here is the RBI Reaction towards these demands
This Wednesday, the Deputy Governer Viral Acharya claimed that the matter of increasing the market timings has been discussed continuously and is under review as they understand that the increased global integration of the market, it is important to facilitate better and fast pricing of the global developments.
What has been proposed by Deputy Governor?
Coming to what we gathered from the statement of Viral Acharya, it has been said that a proposal has been put forth regarding the set up of an internal working group that will hold the responsibility of comprehensively reviewing the timings of the various markets that fall under the purview of the RBI. Along with this the group will also assess the necessary payment as well as settlement infrastructure that can support a co-ordinated timings across the markets.
He also added that the changes to the market timings have to be in sync with the settlement and clearing arrangements as well as their efficiency. However, it is the best idea to leave the decision of the market timing to the market participants, but it is vital that the timings across the products and finding markets complement each other to minimize the possible friction.
This move is actually focused on reducing the administrative and documentation requirements that are currently implemented and making the present set of the regulation more principle-based instead. This will incentivize hedging and disincentivize what might look at hedging transactions.
By the end of the Septemeber, the department is going to release a draft of the revised guidelines for public comments on it. So, let’s hope that they manage to get the hold on the best revision of the new regulations for the Forex market.