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    Question

    According to the IFSCA Circular on Participation in Synthetic Securitisation Programs by IBUs (July 2024), which of the following conditions must be met for IBUs to participate in their Parent Bank’s synthetic securitisation program?

    A IBUs must first obtain approval from the Reserve Bank of India (RBI) Correct Answer Incorrect Answer
    B The home regulator of the IBU must have adopted the Basel III framework Correct Answer Incorrect Answer
    C IBUs must submit a daily report of their exposures to IFSCA Correct Answer Incorrect Answer
    D IBUs must hold physical collateral against the exposures Correct Answer Incorrect Answer
    E IBUs must conduct monthly audits of their participation in the program Correct Answer Incorrect Answer

    Solution

    The circular specifies that for IBUs to participate in their Parent Bank's synthetic securitisation program, the home regulator of the IBU must have adopted the Basel III framework and must not prohibit such transactions.

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