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Informist, Tuesday, Jan. 27, 2026

 

NEW DELHI - After three years of standoff, the European Securities and Markets Authority, the European Union's financial markets regulator and supervisor, signed a memorandum of understanding with the Reserve Bank of India Tuesday to facilitate recognition of central counterparties established in India and supervised by RBI. 

 

"This agreement marks a significant step towards restoring access for EU clearing members to Indian central counterparties and follows two years of sustained engagement between ESMA and RBI," ESMA said in a statement. This will allow Clearing Corp. of India to apply for recognition under European Market Infrastructure Regulation. 

 

The standoff originates from differences between RBI and ESMA over granting supervisory access to Indian clearing houses. In October 2022, ESMA said it had planned to de-recognise six Indian clearing houses, including Clearing Corp of India, from Apr. 30, 2023. It confirmed this de-recognition on May 2, 2023. 

 

In Europe, third-party central counterparties must be supervised by the markets regulator directly. This includes allowing audits and penalties on the counterparty or through "comparable compliance" in other jurisdictions. Since the RBI did not agree with this 'extra-territorial' supervision, recognition for the counterparties was withdrawn. India thought ESMA was being "extra jurisdictional".

 

The Central Bank said the new agreement replaces an earlier MoU signed on Feb. 28, 2017. "The MoU establishes a framework for ESMA to place reliance on RBI's regulatory and supervisory activities while safeguarding the European Union’s financial stability." The MoU also demonstrates the importance of cross-border cooperation to facilitate international clearing activities, it added. 

 

The MoU was signed as part of the series of agreements signed between India and EU Tuesday, including the "mother of all (trade) deals".  End

 

Reported by Priyasmita Dutta

Edited by Akul Nishant Akhoury

 

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