(published August 13, 2012)

(a) Paragraph 11 of the CSA where all onshore derivative transactions are collateralized

(b) Paragraph 11 of the CSA where only onshore INR credit default swap (“CDS”) transactions on Indian corporate bonds are collateralized

Each of the templates is designed to operate with a single ISDA Master Agreement between the parties, under which the parties may enter into (i) transactions between their Indian offices (“onshore transactions”), (ii) transactions between their offshore offices (“offshore transactions”) and (iii) transactions between one party’s Indian office and the other party’s offshore office (“cross-border transactions”). Participants can choose to either collateralize all their onshore transactions or only their onshore CDS transactions by using the appropriate template. Participants should note that cross-collateralization of onshore transactions with offshore or cross-border transactions is not permitted without relevant approvals being obtained under the Foreign Exchange Management Act. The Indian onshore derivatives market is a regulated market and there are also various regulations that govern or have an impact on collateralization. Participants should ensure that they are familiar with the all relevant regulations and guidelines before transacting or entering into collateral arrangements.