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Audit - 22. page

Documentation

Documentation The comprehensive guidelines on derivatives circular require the market participants to ensure that documentation requirements in respect of derivative contracts are complete in all respects.

Identification and Management of Risk

Identification and Management of Risk Market-makers should identify the various types of risk to which they are exposed in their derivatives activities. The main types of risk are:  credit […]

Risk limits

Risk limits Risk limits serve as a means to control exposures to the various risks associated with derivative activities. Limits should be integrated across all activities and measured against aggregate […]

Suitability and Appropriateness

Suitability and Appropriateness While undertaking derivative transactions with or selling structured derivative products to a user, a market-maker should: (a) document how the pricing has been done and how periodic […]

Risk Management and Corporate Governance Aspects

Risk Management and Corporate Governance Aspects The Comprehensive Guidelines on derivatives also sets out the basic principles of a prudent system to control the risks in derivatives activities. These include: […]

Derivatives Markets

Derivatives Markets There are two distinct groups of derivative contracts:  Over-the-counter (OTC) derivatives: Contracts that are traded directly between two eligible parties, with or without the use of an […]

Purpose of Derivstives 

Purpose of Derivstives Users can undertake derivative transactions to hedge an existing identified risk on an ongoing basis during the life of the derivative transaction or for transformation of risk […]

Broad Principles for Undertaking Derivative Transactions

Broad Principles for Undertaking Derivative Transactions The major requirements for undertaking any derivative transaction include:  In addition to generic derivative products, market-makers may also offer structured derivative products to […]

Dealings in Securities on Behalf of Others

Dealings in Securities on Behalf of Others Apart from making investments on its account, a bank may also deal in securities on behalf of its customers only with the prior […]

Forex and Derivatives

Forex and Derivatives Overview of Forex and Derivative Operations in a Bank Banks transact in various treasury instruments with an objective of hedging their risks and also to generate trading […]