(w.e.f: 1-4-1997). — THE RESERVE BANK OF INDIA ACT, 1934

section 45S (w.e.f: 1-4-1997). 51 '[CHAPTER IIID REGULATION OF TRANSACTIONS IN DERIVATIVES , MONEY MARKET INSTRUMENTS , SECURITIES , ETC. 45U. Definitions --For the purposes of this Chapter; derivative means an instrument; to be settled at a future date, whose value is derived from change in interest rate, foreign exchange rate, credit rating O credit index, price of securities (also called "underlying" ) , or combination of more than one of them and includes interest rate swaps, forward rate agreements, foreign currency swaps, foreign currency-rupee swaps, foreign currency options, foreign currency-rupee options O such other instruments as may be specified by the Bank from time to time; (b) "money market instruments' include call o notice money, term money, repo, reverse repo, certificate of deposit, commercial usance bill, commercial paper and such other debt instrument of original or initial maturity up to one year as the Bank may specify from time to time; repo means an instrument for borrowing funds by selling securities with a agreement to repurchase the securities on mutually agreed future date at an agreed price which includes interest for the funds borrowed; "reverse repo' means an instrument for lending funds by purchasing securities with an agreement to resell the securities o mutually agreed future date at an agreed price which includes interest for the funds lent; (e= securities" means securities of the Central Government or State Government or such securities of a local authority as may be specified in this behalf by the Central Government and, for the purposes of "repo" or "reverse repo' include corporate bonds and debentures. 45V . Transactions in derivatives: ~(1) Notwithstanding anything contained in the Securities Contracts (Regulation) Act; 1956(42 of 1956) or any other law for the time being in force, transactions in such derivatives, as may be specified by the Bank from time to time, shall be valid, if at least one of the parties to the transaction is the Bank; scheduled bank, OT such other agency falling under the regulatory purview of the Bank under the Act; the Banking Regulation Act; 1949(10 of 1949), the Foreign Exchange Management Act; 1999(42 of 1999), Or any other Act O instrument having the force of law, as may be specified by the Bank from time to time_ (2) Transactions in such derivatives, as had been specified by the Bank from time to time, shall be deemed always to have been valid, as if the provisions f sub-section (1) were in force at all material times_ 45W Power to regulate transactions in derivatives, money market instruments, etc: The Bank may, in public interest; Or to regulate the financial system of the country to its advantage, determine the policy relating to interest rates or interest rate products and give directions in that behalf to all agencies Or any of them, dealing in securities, money market instruments, foreign exchange, derivatives, or other instruments of like nature as the Bank may specify from time to time: Provided that the directions issued under this sub-section shall not relate to the procedure for execution or settlement of the trades in respect of the transactions mentioned therein; on the Stock Exchanges recognised under

Section Section 45S