RBI and ESMA sign MoU on coop and exchange of info for recognition of central counterparties

 This MoU is part of the list of outcomes during the visit of President of the European Council (Antonio Costa) and President of the European Commission (Ursula von der Leyen) to India.  
| Photo Credit:
FRANCIS MASCARENHAS

The Reserve Bank of India (RBI) and the European Securities and Markets Authority (ESMA) finalized a memorandum of understanding (MoU) on Tuesday, marking the culmination of nearly two years of negotiations. The agreement establishes a framework for cooperation and information exchange regarding the recognition of RBI-regulated central counterparties (CCPs).

This development is expected to facilitate capital inflows from European Union nations into Indian financial markets. It comes at a time when foreign portfolio investors (FPIs) are reducing exposure to Indian equities amid geopolitical tensions and shifting global trade policies.

CCPs act as intermediaries in financial transactions, assuming counterparty risk between buyers and sellers in traded contracts.

The agreement was formalized during the visit of European Council President Antonio Costa and European Commission President Ursula von der Leyen to India.

This accord follows ESMA’s 2022 announcement to withdraw recognition from six Indian CCPs under the European Market Infrastructure Regulation (EMIR).

Affected Entities

The impacted institutions included RBI-supervised Clearing Corporation of India (CCIL), along with SEBI-regulated entities: Indian Clearing Corporation Ltd, NSE Clearing Corporation Ltd, and Multi Commodity Exchange Clearing Corporation Ltd. Additionally affected were IFSCA-supervised India International Clearing Corporation (IFSC) Ltd and NSE IFSC Clearing Corporation Ltd.

The new MoU replaces the 2017 agreement between RBI and ESMA, creating a formal structure for regulatory cooperation. It enables ESMA to recognize RBI’s oversight of CCPs while protecting EU financial stability interests.

The central bank highlighted that this agreement underscores the critical role of cross-border regulatory coordination in supporting global clearing operations.

ESMA noted this agreement paves the way for EU-based clearing members to regain access to Indian CCPs following two years of intensive negotiations between the regulatory bodies.

The European authority described the MoU as demonstrating commitment to international supervisory collaboration and maintaining secure, stable financial markets.

Under EMIR regulations, this agreement permits CCIL to seek renewed recognition from ESMA. The European regulator continues discussions with SEBI and IFSCA to establish comparable cooperation frameworks.

During a December 2023 monetary policy briefing, RBI Deputy Governor T. Rabi Sankar emphasized that such agreements should prioritize cooperation, mutual respect, and deference to domestic regulatory frameworks. He specifically referenced the RBI’s agreement with the Bank of England as exemplifying these principles.

Published on January 27, 2026