RBI-ESMA New Agreement Enables CCIL to Seek European Recognition Again

The Reserve Bank of India (RBI) and the European Securities and Markets Authority (ESMA) signed a Memorandum of Understanding (MoU) on January 27, 2026, to enable regulatory cooperation and information sharing on central counterparties (CCPs), as per news reports.  

The agreement sets out how ESMA can rely on the RBI’s supervisory framework while maintaining safeguards under European rules. It replaces an earlier cooperation pact signed in 2017. 

CCIL Eligible to Seek Recognition Again 

Under the European Market Infrastructure Regulation (EMIR), CCPs based outside the European Union must be recognised by ESMA to provide clearing services to EU financial firms and trading venues.  

The MoU meets a key requirement under Article 25 of EMIR and allows the Clearing Corporation of India Ltd (CCIL), supervised by the RBI, to reapply for recognition. ESMA said the agreement facilitates cooperation for third-country CCP approvals. 

Background to the Recognition Withdrawal 

ESMA withdrew recognition for 6 Indian CCPs on 31 October 2022 after determining that regulatory cooperation arrangements required under EU rules were not in place.  

The withdrawal took effect on April 30, 2023, following a transition period. The dispute followed ESMA’s request for direct audit and inspection rights over CCIL for trades involving European banks, which the RBI declined, citing jurisdictional limits. 

Impact on European Market Participants 

Following the withdrawal, European banks faced higher capital charges on exposures linked to Indian clearing houses.  

This increased the cost of trading Indian bonds and limited participation by EU-based institutions. Temporary access was allowed to ensure market continuity while discussions between regulators continued. 

Further Regulatory Talks and Trade Context 

ESMA said discussions are ongoing with the Securities and Exchange Board of India (SEBI) and the International Financial Services Centres Authority (IFSCA) to conclude similar cooperation arrangements.  

The MoU was signed by RBI Executive Director Vivek Deep and ESMA Chair Verena Ross. The agreement coincides with India-EU trade negotiations aimed at reducing tariffs and expanding bilateral trade. 

Read More: India to Halt Annual Targets for Clean Energy Tenders!  

Conclusion 

The MoU creates a formal framework for cooperation between the RBI and ESMA and allows Indian CCPs, including CCIL, to restart the process of seeking EU recognition under EMIR. 

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