Master Direction – Reserve Bank of India (Variation Margin) Directions, 2022

Question 1

……………………………..mean derivative contracts whose settlement is not guaranteed by a central counterparty.

Answer 1

Non-centrally cleared derivatives (NCCDs)

Question 2

As there is no central counterparty involved there arises a risk of default by any counterparty. Hence to avert this risk the counterparties have to pay the ……………………….. which shall be exchanged to fully collateralise to market or settle to market, the mark-to-market exposure of an NCCD contract

Answer 2

Variation Margin