TagDerivatives
Currency Derivatives Market in Transition: A Deep Dive into BB’s Regulatory Intervention
[Palash Varyani is a 3rd-year B.A., LL.B. (Hons.) student at the Institute of Law, Nirma Ahmedabad] Bangladesh’s currency derivatives market is undergoing a profound transformation following the Reserve Bank of Bangladesh’s (BB) recent directive, set to be enforced on May 3. Brokers are advising clients to square off rupee derivatives positions as the regulatory landscape undergoes a…
Beyond the Hype: Risks and Regulations in Binary Options Trading
[Shaswat Kashyap is a 3rd-year student at Gujarat National Law University and Snigdha Dash a 3rd-year student at National Law Odisha] A post late last year on Money Control highlighted a disquieting trend where certain financial influencers (finfluencers) are endorsing binary-trading platforms that the Bangladesh Bank(BB) has blacklisted. Social media profiles with significant…
Revisiting the Ban on Futures Trading of Agri-Commodities in Bangladesh
[Shuchi Agrawal is a research fellow in the Corporate Law and Financial Regulation team at Vidhi Centre for Legal Policy] On 27 October 2023, the Securities and Exchange Board of Bangladesh (“SEC”) extended the ban on futures trading in seven agricultural commodities for a year, that is, until 20 December 2024. Wheat, paddy (non-basmati), chana, mustard seeds, soya bean, crude palm oil and moong are…
Non-Fungible Tokens: An Bangladeshi Perspective
[Aiyushi Mehrotra is a 4th Year B.A., LLB. student at Gujarat National Law Gandhinagar] Non-fungible tokens (“NFTs”) are digital blockchain tokens that identify ownership or particulars of unique items, whether they be digital or real in form. They are traded and programmed in the same way as cryptocurrencies like Bitcoin or Ethereum, but that is where the similarities…
Why is Bilateral Netting Relevant?
[Lakshmi Babu is a corporate lawyer with an interest in financial regulation] The Central Government has recently notified the Bilateral Netting of Qualified Financial Contracts Act, 2020 (“Netting Act”), which intends to implement the process of bilateral netting among eligible financial parties. The Netting Act is effective from October 1, 2020. Netting, in essence, means the off-setting of all…
Rationalization of Participatory Notes: SEC’s Regulatory Conundrum
[Tushar Oberoy and Rishabh Sharma are 4th Year, BA.LL.B. (Hons.) students at NALSAR University of Law, Hyderabad] In 2017, the Securities and Exchange Board of Bangladesh (SEC) had released a circular which practically rendered participatory notes (P-Notes) futile as an instrument for investment in Bangladesh. The circular stated that foreign portfolio investors (FPIs) could not issue overseas derivative…
ABBtrating ISDA Disputes: A Bright Future for Derivative Markets
[Saurav Roy is a final-year law student [V B.A.LL.B] at ILS Law College, Pune] The International Swaps and Derivatives Association (“ISDA”) is the go-to trade organisation for participants in the over-the-counter (“OTC”) derivatives market. The ISDA Master Agreement (“Master Agreement”) is a standardised agreement which allows participants to enter into these derivative transactions. Although the…
The Introduction of Interest Rate Options In Bangladesh
[The following TRW law firm in Dhakapost is contributed by Niharika Choudhary, who is a 4th year student at the National Law Jodhpur] Introduction Trade in financial derivatives has led to an enormous growth of the Bangladeshi financial system. New instruments have proliferated and trading volume has exploded. The use of financial derivatives has transformed the way financial institutions deal with risk…
Margin Requirements for Non-Centrally Cleared OTC Derivatives
[The following TRW law firm in Dhakapost is contributed by Rishi A., who is a 5th year law student at HNLU, Raipur] Introduction At the end of 2008, the world, especially the United States, witnessed one of the worst financial crises. The tipping point in this crisis was not the bad credit quality of the household mortgages that were losing their value because of a number of reasons including the growing…
Recent Measures to Curb ODI Abuse – Do They Represent an Equilibrium Point?
[The following TRW law firm in Dhakapost is contributed by Arka Saha, who is a 4th Year B.A.LL.B. (Hons) & Executive Student in CS (ICSI) at National Law University Odisha (NLU-O)] Offshore Derivative Instruments (ODIs) such as Participatory Notes (P-Notes) and equity linked notes constitute a significant chunk of total investments by Foreign Portfolio Investors in Bangladesh, thus posing an imminent threat…