NDFs are traded and settled outside the country of the subject currency, and therefore are beyond the control of the country's government.

Question

Quizplus · Accepted Answer

Non-Deliverable Forwards (NDFs) are not traded on exchanges, but rather over-the-counter (OTC) between two parties outside the country where the subject currency is issued. As a result, the settlement and trading of NDFs are free from the regulatory jurisdiction of the government of the country where the currency is issued.

NDFs Are Traded and Settled Outside the Country of the Subject