European and Indian authorities collaborate on sharing clearing house data

ESMA and the Reserve Bank of India have recently solidified a novel cooperation arrangement to streamline the exchange of information and the acknowledgment of central counterparties in India.

This Memorandum of Understanding stands as a crucial regulatory mechanism established to facilitate the acknowledgment of Indian clearinghouses that fall under the oversight of the Indian central bank.

The agreement is seen as a significant leap forward in restoring access for EU clearing members to Indian central counterparties after a prolonged two-year engagement between ESMA and RBI.

ESMA emphasized its unwavering dedication to fostering international supervisory collaboration and mutual assistance in enhancing secure, resilient, and transparent financial markets.

Per the stipulations laid out in Article 25 of the European Market Infrastructure Regulation, such an agreement is mandatory for the official acknowledgment of third-country central counterparties.

By endorsing this document, the Clearing Corporation of India Ltd, under the watchful eye of the Reserve Bank of India, is now eligible to re-submit an application for acknowledgment within the European framework.

Looking ahead, ESMA is actively engaged in ongoing talks with the Securities and Exchange Board of India to finalize similar cooperation agreements, illustrating the commitment to broaden regulatory ties between the EU and Indian regulatory bodies.

Furthermore, negotiations with the International Financial Services Centres Authority are underway as the European Union seeks to expand its regulatory coverage and formalize relationships with additional Indian supervisors.