The European Securities and Markets Authority has approved recognition for India’s Clearing Corporation, according to a source directly familiar with the matter.The approval ends a years-long standoff brought on by the ESMA seeking supervisory powers over the South Asian nation’s key bond clearing house.
Here are the key highlights:
• The Clearing Corporation of India Ltd (CCIL) will be recognised as a central counterparty under European Market Infrastructure Regulation (EMIR).
• This will allow CCIL to continue to remain under the supervision of the Reserve Bank of India.• The approval is part of the memorandum of understanding signed between the ESMA and the RBI earlier this year.
• The approval was necessary before June 30 as capital adequacy requirement of European banks clearing via CCIL was set to rise without approval.
• A final approval for the recognition will be put in place once the EMIR Act is amended.
• CCIL and ESMA did not immediately respond to a request for comment.
