The European Securities and Markets Authority (ESMA) and the Securities and Exchange Board of India (SEBI) have signed a Memorandum of Understanding to enable cooperation and information exchange regarding the recognition of central counterparties (CCPs) established and supervised in India. The agreement represents a breakthrough following over two years of regulatory engagement between European and Indian authorities.
- Previous milestone: ESMA signed MoU with Reserve Bank of India (RBI) earlier in 2024
- Key requirement: Article 25 of the European Market Infrastructure Regulation (EMIR) for third-country CCP recognition
- Next phase: Similar cooperation arrangement discussions ongoing with the International Financial Services Centres Authority (IFSCA)
The accord follows an earlier MoU between ESMA and the Reserve Bank of India, establishing a coordinated regulatory framework between European and Indian financial authorities. This dual-track approach reflects efforts to harmonize oversight of cross-border clearing infrastructure and restore market access for EU clearing members to Indian CCPs.
Under the new framework, Indian CCPs supervised by SEBI can now reapply for recognition under EMIR, a critical regulatory requirement for accessing European markets. The MoU codifies supervisory cooperation protocols and establishes information-sharing mechanisms between the regulators, addressing compliance standards necessary for cross-border clearing operations.
ESMA, the EU’s financial markets regulator, stated the agreement reflects its commitment to international supervisory cooperation and maintaining safe, resilient, and open financial markets. The authority continues parallel discussions with the IFSCA to establish similar cooperation arrangements, signaling broader efforts to integrate Indian financial infrastructure with European markets.
