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.
