India: Compliance

Novation has existed in Indian over the counter ("OTC") derivative markets for years, but as derivative volumes and market maker turnover grew, the absence of a comprehensive framework spanning asset classes became a genuine gap. In July 2025, the Reserve Bank of India ("RBI") released a draft titled "Reserve Bank of India (Novation of OTC Derivative Contracts) Directions, 2025", seeking to close this gap through a unified set of directions. After consultation with various stakeholders, RBI finalised the framework on 22 September 2026, but abandoned the standalone Directions format.

In the same statewide drive, two of Mumbai’s best known eateries, a 122 year old Irani cafe near Marine Lines and a well-known upmarket Chinese restaurant, have had their food licenses suspended. Both cases pose the same legal questions about the speed of a regulator’s action, what it must prove and when a suspension must end.

Corporate compliance in India is evolving from a mere regulatory obligation into a strategic asset that can influence transaction speed, investor confidence, and market positioning.