RBI, ESMA Sign MoU to End Clearing Standoff, Paving Way for CCIL Recognition

• The Reserve Bank of India (RBI) and the European Securities and Markets Authority (ESMA) signed an MoU to enhance cooperation and information exchange on central counterparties (CCPs).
• This new MoU replaces a 2017 agreement, establishing a framework for regulatory cooperation aligned with their respective laws.
• The agreement allows ESMA to rely on RBI's regulatory oversight, ensuring EU financial stability and facilitating international clearing.
• The MoU is crucial for ESMA's recognition of third-country CCPs under EMIR Article 25, enabling the RBI-supervised Clearing Corporation of India Ltd (CCIL) to reapply for recognition.
• This resolves a long-standing issue since 2022, which restricted EU clearing members' access to Indian CCPs, and reflects ESMA's commitment to international supervisory cooperation.

Why It Matters: RBI and ESMA's new MoU resolves a clearing standoff, enabling CCIL's EU recognition and boosting financial cooperation.