News Excerpt:

The Reserve Bank of India (RBI) and the Bank of England (BoE) recently signed an agreement (MoU) about working together and sharing information regarding the Clearing Corporation of India Ltd (CCIL).

More detail on news

• Last year, a European regulator called European Securities and Markets Authority (ESMA) withdrew recognition of some Indian clearing entities, including CCIL.
• This move led to a disagreement because the RBI did not want foreign supervision of these entities, stating that they follow strong risk management practices.
• In response, RBI and BoE signed this MoU, allowing BoE to trust and rely on RBI's regulatory activities.
• The agreement also supports the application of CCIL to be recognized as a third-country clearing entity by the Bank of England.
• This recognition is necessary for UK-based banks like Barclays and Standard Chartered to continue providing clearing and settlement services in India.

Clearing Corporation of India Ltd (CCIL)

• CCIL is regulated by RBI and it was founded in April 2001 to guarantee clearing and settlement for transactions in Money, G-Secs, Foreign Exchange, and Derivative markets.
• Efforts of CCIL led to improved market efficiency, transparency, liquidity, and risk management.
• CCIL also provides non-guaranteed settlement for Rupee interest rate derivatives and cross currency transactions through the CLS Bank.
• CCIL’s adherence to the stringent principles governing its operations as a Financial Market Infrastructure has resulted in its recognition as a Qualified Central Counterparty (QCCP) by the Reserve Bank of India in 2014.
• CCIL is also the Trade Repository for all Over the Counter (OTC) transactions in the Forex, Interest Rate and Credit derivative transactions.