participants in their role as submitters and benchmark administrators. and above all, recognizing that every system is in a process of constant evolution. while a transition from polled rates to actual traded rates is a justifiable trend in the post - gfc world, it may serve us well to remember that a traded price is stale, its pricing information is no longer relevant. perhaps we would move towards a more relevant basis for benchmarks in the future. and that would require all of us to be constantly striving to create better benchmarks.

liquidity. to this end, measures enabling non - residents to undertake transactions with authorised dealer banks in india ; providing indian banks with access to offshore markets to undertake non - deliverable transactions etc., have been taken. for the benefits to accrue to pricing ( and therefore benchmarks ) it is necessary that price impulses move freely from onshore to offshore and vice versa. among other things, this may require linked and interoperable infrastructure, common market - makers across the segments and eventually a frictionless channel for investors to move from one market to the other. there is a strong case to work towards a long - term solution to this segmentation d. extra territoriality – a probably unintended consequence of the post - gfc drive towards de - risking otc derivatives markets has been the tendency of developed economies to contain the risk of their entities by attempting to maintain control of regulation and risk management practices of third countries. thus, for example, european banks may not be able to operate through indian financial infrastructure entities ( like ccps, benchmark administrators, etc. ), unless their home regulator accords “ equivalence ” treatment to the indian infrastructure entities or these entities are endorsed or recognized. such treatment involves ability to call for information, supervise, inspect and ( at least potentially ) impose penalty on indian entities. this amounts to an unfortunate interference in the regulatory architecture in india, especially given the fact that these indian entities meet relevant global best standards, set by committee on payments and market infrastructures ( cpmi ) - iosco. similar extrajurisdictional overreach is hanging over fbil as well. the potential disruption to forex markets, both onshore and ndf, can be rather serious. that such disruption flows from the action of regulators is not in alignment with the post - gfc global consensus on de - risking financial markets. all regulated entities understand the costs and constraints of compliance. it cannot be anyone ’ s argument that replicating such obligations for every regulator in every jurisdiction is an efficient arrangement. a satisfactory solution to this impending complication needs to be found quickly. 21. as we all understand, a benchmark is as good as the underlying market. developing good benchmarks is eventually dependent on developing deep and liquid financial markets, which is an ongoing and drawn - out process. meanwhile, effort can focus on improving the integrity and credibility of the benchmark process. this requires achieving a balance between good statistical techniques and realistic subjective judgement, of both market