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The European Securities and Markets Authority (ESMA) will withdraw third-country CCP recognition of six Indian central counterparties under the European Market Infrastructure Regulation (EMIR), with this decision taking effect from 30 April 2023.
These are the Clearing Corporation of India (CCIL), the Indian Clearing Corporation Ltd (ICCL), NSE Clearing Ltd (NSCLL), the Multi Commodity Exchange Clearing (MCXCCL), the India International Clearing Corporation (IFSC) and the NSE IFSC Clearing Corporation Ltd (NICCL)
Under the terms of EMIR, ESMA was required to tier and review the recognition status of all third-country CCPs that received recognition before 21 September 2002.
On the basis of its assessment, the European securities market regulator concluded that the cumulative conditions for recognising these third-country CCPs under EMIR have not been met since no cooperation agreements have been established between ESMA and the relevant Indian market authorities in accordance with EMIR Article 25(7).
These regulatory authorities are specifically the Reserve Bank of India (RBI, which supervises CCIL), the Securities and Exchange Board of India (SEBI, which supervises ICCL, NSCCL and MCXCCL) and the Indian Financial Centre Services Authority (IFCSA, which supervises IFSC and NICCL).
As a result of this decision, which was finalised on 31 October, these six third-country CCPs will no longer be authorised to provide services to clearing and members and trading venues established in the European Union.
ESMA will defer the application of these withdrawal decisions until 30 April 2023, indicating that it wishes to minimise any adverse impact that this may have on EU market participants.
Currently, 41 third-country CCPs, established in a country outside of the EU, have been recognised to offer services and activities within the Union.
