It is an association for derivatives market in India

2. INTRODUCTION

The Fixed Income Money Market and Derivatives
Association of India (FIMMDA), an association of
Commercial Banks, Financial Institutions and Primary
Dealers, was incorporated as a Company under section
25 of the Companies Act,1956 on June 3rd, 1998.
FIMMDA is a voluntary market body for the
bond, money and derivatives markets.

3. HISTORY OF FIMMDA
• The Fixed Income Money Market and Derivatives
Association of India (FIMMDA), an association of
Scheduled Commercial Banks, Public Financial
Institutions, Primary Dealers and Insurance Companies
was incorporated as a Company under section 25 of the
Companies Act,1956 on June 3rd, 1998.
• FIMMDA is a voluntary market body for the
bond, money and derivatives markets.
• FIMMDA has members representing all major
institutional segments of the market.

4. CONT…
• The membership includes Nationalized Banks such as State Bank
of India, its associate banks and other nationalized banks; Private
sector banks such as ICICI Bank, HDFC Bank, IDBI Bank;
Foreign Banks such as Bank of America, ABN
Amro, Citibank, Financial institutions such as IDFC, EXIM
Bank, NABARD, Insurance Companies like Life Insurance
Corporation of India (LIC), ICICI Prudential Life Insurance
Company, Birla Sun Life Insurance Company and all Primary
Dealers.

5. CONT…
• FIMMDA have been holding Annual Conferences every
year, which provide an opportunity for market professionals from
the Indian Fixed Income and Derivatives markets to discuss and
interact with each other, the distinguished speakers and panelists
and bring the global best practices to the Indian market.
• The conference also provides an opportunity for the delegates to
network with other market participants from India and abroad, and
widen their understanding and knowledge base in their specialized
fields.
• The conference also provides an opportunity for the service
providers of Treasuries and Treasury Products to exhibit and
market their services and products.

6. FIMMDA’S CRITERIA
• FIMMDA membership is open to scheduled
commercial banks, financial institutions, primary
dealers and insurance companies.
• Membership Charges :
The FIMMDA membership fee is Rs. 200000 /annually with a onetime registration fee of Rs.
200000 /-

7. Membership Base
•
•
•
•
Public Sector Banks (26 in number)
Private Banks (19 in number)
Financial Institutions (09 in number)
Insurance Companies (07 in number) Foreign Banks (27 in
number)
• Primary Dealers (07 in number)

8. OBJECTIVES
• To function as the principal interface with the regulators
on various issues that impact the functioning of these
markets.
• To undertake developmental activities, such
as, introduction of benchmark rates and new derivatives
instruments, etc.
• To provide training and development support to dealers
and support personnel at member institutions.
• To adopt/develop international standard practices and a
code of conduct in the above fields of activity.

9. CONTINUED..
• To devise standardized best market practices.
• To function as an arbitrator for disputes, if
any, between member institutions.
• To develop standardized sets of documentation.
• To assume any other relevant role facilitating
smooth and orderly functioning of the said
markets.

10. Fimmda securities
• What are the securities?
• What are the fixed income securities?
• What are the type of fixed income securities?
• what is the difference between a fixed income security and
equity?

11. CONT….
• What are the fixed interest rate securities and floating
interest rate securities?
• What are the key components of fixed income securities?
• What is the yield on a security?
• What is maturity?

12. CONT….
• What are coupon payment?
• What are callable securities?
• What is the relationship between price and yield?

13. Fimmda
1)India removes trading band for govt bonds on Friday FIMMDA :
• MUMBAI (Reuters) - The Fixed Income Money Market and
Derivatives Association of India said there would be no trading
bands for government bonds and other securities on Friday.
• The trading body has been removing or relaxing trading bands
in recent sessions in view of the sharp volatility in government
bonds.
• The government will sell 150 billion rupees of bonds later in
the session which will again test the central bank's willingness to
offer high yields to investors as it tries to support the rupee.

14. CONT…..
2)VALUATION OF GOVERNMENT SECURITIES Central Government
Securities, which qualify for SLR :
• The prices as well as the yield curve for all Central Government Securities are
published by FIMMDA.
For valuation of all other securities FIMMDA’s Par/Base Yield Curve, which is
derived from the Central Government Securities yield curve should be used.
•
The Par/Base Yield Curve starts from three-month tenor. The yield for three-month
tenor would also be applicable for maturities less than three months.
• Central Government Securities, which do not qualify for SLR
FIMMDA will publish the prices for all the Central Government Securities which do
not qualify for SLR in accordance with the “Note to para 3.7.1 of RBI Master
Circular for banks dated July 1, 2011” (Change)
State Government Securities
FIMMDA will publish the prices for all the State Government Securities in
accordance with “para 3.6.2 of RBI Master Circular for banks dated July 1, 2011”

15. CONT…..
3)Reference Rates - FIMMDA-NSE MIBID MIBOR
In particular, a call money reference rate can find the
following applications:
•Traders can make many decisions as offsets compared
with the prevailing reference rate.
•Derivatives require a clearly defined reference rate as a
foundation, off which the pay-off from the derivative is
defined.
•A variety of contracts can be structured as offsets from
the future levels of a reference rate. The simplest example
may be a floating rate bond that uses an interest rate
which is a given 'n' offsets above a given reference rate.

16. SWOT ANALYSIS

17. STRENGTH
1)LARGE SUPPLY OF SECURITIES
Enabling creation of benchmark securities with sufficient
2)STATE OF ART
A)electronic bidding
B)faster processing
C)flexibility to dispose of securities on same day
3)CLOSE COORDINATION
A)debt and monetary management
B)monetary and fiscal policies
outstanding stock

18. Growth in Outright and repo settlement volumes (in Rs. Crore)
7000000
6000000
5000000
4000000
3000000
2000000
1000000
0
2002-03
2003-04
2004-05
2005-06
G-sec
2006-07
Repo
2007-08
2008-09
2009-10

19. WEAKNESS
1)FISCAL DOMINANCE
2)SHORT SELLING

20. Holder Profile in Central Govt securities as on end Mar 2010
4%
12%
1. Commercial Banks
2. Bank- Primary Dealers
38%
7%
3. Non-Bank PDs
4. Insurance Companies
5. Mutual Funds
1%
6. Co-operative Banks
3%
7. Financial Institutions
0%
8. Corporates
3%
9. FIIs
10. Provident Funds
1%
11. RBI
12. Others
22%
9%
0%

21. THREATS
1)PRESSURE FOR RUPEE DOLLAR
EXCHANGE RISK
2)LOW MONEY MARKET

22. OPPORTUNITIES
1)INNOVATION AND INTRODUCE NEW
PRODUCT
2)MARKET GOVERNMENT SECURITIES AS
ANOTHER PRODUT FOR INVESTMENT