3 min readMumbaiJan 27, 2026 10:19 PM IST
The Reserve Bank of India (RBI) and the European Securities and Markets Authority (ESMA), the European Union (EU’s) financial markets regulator and supervisor, signed a memorandum of understanding (MoU) for exchange of information for the recognition of central counterparties (CCPs).
The agreement will help resolve the long-pending dispute between India and ESMA over the supervision of domestic CCPs including the Clearing Corporation of India Ltd (CCIL). The MoU comes on the day India and the EU announced the conclusion of negotiations on the landmark Free Trade Agreement (FTA).
With the signing of the MoU, European banks can now comfortably clear and settle their clients transactions on the CCIL. Some of the major European banks having operations in India include Societe Generale, Deutsche Bank and BNP Paribas.
Central counterparties perform two main functions as the intermediary in a market transaction — clearing and settlement — and guarantee the terms of a trade.
“The MoU enables RBI and ESMA to cooperate regarding CCPs, in line with their respective laws and regulations. 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,” RBI said in a release.
The agreement demonstrates the importance of cross-border cooperation to facilitate international clearing activities. The pact replaces an earlier MoU between RBI and ESMA which was entered into on February 28, 2017.
In a separate statement, the ESMA said that the 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.
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“The MoU is a key requirement under Article 25 of the European Market Infrastructure Regulation (EMIR) for the recognition by ESMA of third-country CCPs. It allows the Clearing Corporation of India Ltd (CCIL), a CCP established in India and supervised by RBI, to re-apply for recognition under EMIR,” ESMA noted.
The MoU reflects ESMA’s strong commitment to international supervisory cooperation and mutual support to advance safe, resilient and open financial markets, the statement said.
It could be noted that in October 2022, ESMA withdrew recognition of six Indian third-country central counterparties (TC-CCPs) under the EMIR regime, namely:
CCIL
The Indian Clearing Corporation Ltd (ICCL)
NSE Clearing Ltd (NSCCL)
Multi Commodity Exchange Clearing (MCXCCL)
India International Clearing Corporation (IFSC) Ltd (IICC)
NSE IFSC Clearing Corporation Ltd (NICCL)
The derecognition of Indian CCPs was announced due to ‘no cooperation arrangements’ between ESMA and Indian regulators, namely, the RBI, the Securities and Exchange Board of India (SEBI) and the International Financial Services Centres Authority (IFSCA).
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While ICCL, NSCCL and MCXCCL are supervised by the SEBI, IICC and NICCL are regulated by the IFSCA.
ESMA added that it was also continuing discussions with the SEBI and the IFSCA to conclude similar cooperation arrangements.
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