Letter to the Reserve Bank of India on their Draft Report of the Internal Group on Introduction of Credit Default Swaps for Corporate Bonds

MFA submitted a letter to the Reserve Bank of India on their Draft Report of the Internal Group on Introduction of Credit Default Swaps for Corporate Bonds. Our letter explainsthat a prohibition on buying or selling CDS without exposure to the underlying bonds has the potential to eliminate the benefits of CDS entirely by making it too costly for market participants to transact. Also, we address concerns with respect to CDS without an underlying cash market position raised by the Draft Report.

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