The Clearing Corp. of India Ltd. (CCIL) has submitted an application earlier this month to the European Securities and Markets Authority (ESMA) for recognition under European market infrastructure guidelines, according to people familiar with the developments. As reported by The Hindu BusinessLine, this move represents a significant step toward resolving longstanding regulatory disputes between European and Indian authorities.
The application comes after ESMA and the Reserve Bank of India signed an agreement in late January ending a yearslong dispute about oversight of the central bank-supervised clearinghouse. According to Bloomberg, ESMA had announced the withdrawal of CCIL's recognition in October 2022, while the RBI maintained that demands for access to the clearing house books interfered with domestic regulations.
The recognition would potentially allow lenders like Deutsche Bank AG and BNP Paribas SA to trade bonds more easily in India, as reported by The Hindu BusinessLine. European banks currently serve as key market-makers for Indian bonds and derivatives, though they face additional charges when trading with unrecognized clearinghouses. A final decision on the application is yet to be made, according to people familiar with the matter.
