Fedai to revamp code of conduct

Various clauses will be reviewed in the light of the technological changes which have modified methods of trading and settlement. The changes will be incorporated to govern various innovative ways of communication such as online trading through internet.

Besides, existing norms only allow telephonic deals, while dealers and brokers enter into deals through mobile phones and faxes as well which are not acounted for under existing guidelines.

According to P K Pain, chief executive of Fedai, "The focus of the self regulatory organisation has undergone a major change in the recent past to meet new challenges. Instead of just being a regulatory body, it has diversified into international trade related activities, advisory services and new product development."

It is closely associated with International Chamber of Commerce, Paris for framing new rules and regulations for the development of global trade business.

ICC, a non-governmental organisation with membership spreading over 140 countries, is incidentally holding its Banking Commision meet this year in India at New Delhi.

Keeping in view the changes, Fedai has already introduced the issuance of standby letter of credit to importers as per International Standard Practices for import of goods.

Earlier, banks used to only issue guarantees whereas in the developed economies such as the United States and Canada, standby letters of credit is the norm.

In product development, it proposes to expand the horizon of the recently launched rupee dollar options by introducing exotic options in consultation with the Reserve Bank of India.

In this regard, it is working in tandem with statutory and regulatory organisations for the introduction of new risk management instruments.

It has already framed accounting standard 11 for forex transactions to be included as part of manual for Institute of Chartered acountants of India.

In order to prepare professional cadre among banks and broker community, it is planning to offer cetification courses on forex derivatives in due course of time.