of the important initiatives underway to develop indian capital markets further : a. task force on offshore rupee markets the reserve bank constituted a task force in february 2019 to examine in depth issues relating to the offshore rupee markets and recommend appropriate policy measures to align incentives for non - residents to gradually move to the domestic market for their hedging requirements and also to ensure the stability of the external value of the rupee. the report of the task force is due by mid - july 2019. b. internal working group on market timings the reserve bank has set up an internal working group on market timings which will comprehensively review the timings of various markets that are under the purview of the reserve bank, and will assess the necessary payment and settlement infrastructure that can support co - ordinated timings across these markets. the working group ’ s report, after submission, will be released for public feedback. c. task force on the development of secondary market for corporate loans the reserve bank has constituted a task force on the development of secondary market for corporate loans. it will suggest required policies for facilitating the development of a secondary market in corporate loans, including loan transaction platform for stressed assets, creation of a loan contract registry, its ownership structure and related protocols such as the standardization of loan information, independent validation and data access. the report of the task force is due by the end of august 2019. d. committee on the development of housing finance securitisation market the reserve bank constituted this committee to assess the state of housing finance securitisation markets in india ; study the best international practices as well as lessons learnt from the global financial crisis ; and propose measures to further develop these markets in india by identifying critical steps required such as, inter alia, definition of conforming mortgages, mortgage documentation standards, digital registry for ease of due diligence and verification by investors, avenues for trading in securitised assets, etc. the report of the committee is due by the end of august 2019. in summary, it should be clear that while indian capital markets have evolved steadily to a stage of long - run viability, the potential for developing and strengthening them further is limitless … “ let us, then, be up and doing, with a heart for any fate ; still achieving, still pursuing, learn to labour and to wait. ” – – a psalm of life by henry wadsworth longfellow ( 1807 – 1882 )

write off after close out netting – if collaterals are part of the closeout netting, then there may be a possibility of write offs as part of bankruptcy proceedings. the crisis has also underlined the risks inherent in re - hypothecating assets. where assets are re - hypothecated, they are at best difficult to identify and extract in the event of bankruptcy. at worst, the assets may never be located, leaving clients to stand in line with other creditors to try and get their assets. perhaps this is a challenge to the legal mechanism to protect the interest of the original holders. this highlights the flaws in the co - mingled account model also. assets held in co - mingled accounts can be difficult to identify if the prime broker fails, leaving administrators with the task of identifying which assets belong to which clients. some suggest the use of the tri - party collateral management model in which a third party sits between the prime broker and their hedge fund or other clients holding the collateral in segregated accounts. however, concentration of such repos with only few banks aggravates systemic risk. i would like to cite another instance of issues regarding re - use of collaterals. in one case a bank entered into equity finance1 and standard securities lending arrangements with a number of brokers. the securities lent to the bank by brokers were generally obtained as a result of the equity finance arrangements between the brokers and their clients. however, after the collapse of one of the brokers there was dispute about the ownership of securities highlighting the loopholes in the agreement entered. indian experience though the financial services industry in india is of a relatively recent origin, there have been many tricky legal issues that the industry has faced over the years. i would like to refer to one of the early instances where the legality of a market product, ready forward transactions, was decided by the supreme court in a landmark judgement. ready - forward ( repo ) transactions were quite popular in the market in the eighties. but immediately after irregularities in indian capital markets in early nineties, the legality of this product was challenged. the supreme court of india2 held that ready forward contract is severable into two parts, namely, ready leg and forward leg. it further held that the ready leg is valid but the forward leg is not. therefore all the repo transactions were treated and accounted as outright sale and purchase transactions. the lending and borrowing nature of repo transactions has now been captured in the amendment to