The European Securities and Markets Authority (ESMA) has signed a Memorandum of Understanding (MoU) with the Securities and Exchange Board of India (SEBI) to establish a framework for cooperation and information exchange concerning central counterparties established in India.
Framework for central counterparty recognition
Under the terms of the bilateral agreement, central counterparties (CCPs) established in India and supervised by SEBI will be permitted to re-apply for official recognition under the European Market Infrastructure Regulation (EMIR). Establishing a formal cooperation arrangement is a core requirement set out in Article 25 of EMIR for third-country CCPs seeking recognition by ESMA.
Restoring market access and future steps
The agreement follows the execution of a separate MoU between ESMA and the Reserve Bank of India (RBI) earlier this year. These steps build upon more than two years of sustained engagement between European Union and Indian market regulators, aiming to restore access for EU clearing members to Indian CCPs.
In addition to the pact with SEBI, ESMA is continuing supervisory discussions with the International Financial Services Centres Authority (IFSCA) to conclude a similar regulatory cooperation arrangement.
