SEBI, ESMA sign MoU for cooperation on Central Counterparties (CCPs)

SEBI and the European Securities and Markets Authority (ESMA) signed a new Memorandum of Understanding (MoU) for cooperation on Central Counterparties (CCPs). The pact replaces a 2017 agreement and aims to enhance information exchange.

The Securities and Exchange Board of India (SEBI) and the European Securities and Markets Authority (ESMA) have signed a Memorandum of Understanding (MoU) to strengthen cooperation and exchange of information relating to Central Counterparties (CCPs) regulated and supervised by SEBI. The MoU establishes a framework for cooperation between the two authorities in relation to CCPs, in line with their respective laws and regulations.

In an official statement on Friday, SEBI stated “SEBI signs MoU with European Securities and Markets Authority on cooperation and exchange of information relating to Central Counterparties”. The agreement was signed by SEBI Chairman Tuhin Kanta Pandey and ESMA Chair Verena Ross. The new MoU replaces an earlier agreement between SEBI and ESMA that was signed on June 21, 2017.

Framework for Cooperation

According to the agreement, the two authorities will be able to cooperate and exchange information concerning CCPs that fall under SEBI's regulatory and supervisory framework. A CCP is an entity that helps facilitate and manage transactions in financial markets by standing between buyers and sellers.

The latest agreement provides a framework for regulatory authorities in India and the European Union to cooperate on matters concerning such entities. The MoU also establishes a framework under which ESMA can place reliance on SEBI's regulatory and supervisory activities relating to CCPs, while safeguarding the financial stability of the European Union.

Supporting International Clearing Activities

The agreement is aimed at supporting cooperation between the two regulators while taking into account the respective legal and regulatory frameworks of India and the European Union. The MoU also highlights the importance of cooperation between financial market regulators across countries, particularly as financial markets and clearing activities increasingly involve participants and institutions operating across borders.

The agreement is also expected to support international clearing activities by providing a framework for the two authorities to work together while ensuring that their respective regulatory responsibilities are maintained. (ANI)

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