Fimmda has been incorporated as a company under section 25 of the Companies Act in consultation with Price Waterhouse under the USAID-sponsored Financial Institutions Reforms and Expansion (FIRE) project. The FIRE project is sponsored by USAID to help in the modernisation of the Indian capital markets. Price Waterhouse is the consultant to the project.

The Fimmda has the following terms of reference: Devise standardised best market practices and documentation, operate as the principal interface with regulators, adopt and develop a code of conduct, function as an arbitrator, if any, between members, undertake development activities and assume other relevantroles of importance in the said markets.

According to Bank of America managing director, global capital markets group-India, Arvind Sethi: "Our financial sector has benefited since the 1991 reforms... but there is still a long way to go for the country to acquire an efficient and reliable infrastructure for these markets. Fimmda will take care of the developmental needs in this area."

ABN Amro Bank country treasurer Vishnu Deuskar said: "Fimmda is dedicated to the professional functioning of the debt and derivative market."

Fimmda will have four task forces: one each for the primary and secondary markets, another for infrastructure, market practices and settlement and the fourth for framing a code of ethics and market development.

Eligible members of Fimmda are commercial banks, financial institutions and primary dealers. Other market participants can be associates without voting rights.

The membership fee to Fimmda has been fixed at Rs 50,000, inclusive of a one-time admission fee of Rs 30,000 andan annual fee of Rs 20,000 for the current fiscal.