India, EU Regulators Strengthen Ties
Sebi and ESMA replace 2017 pact with new deal to boost cross-border cooperation on central counterparties
The Securities and Exchange Board of India (Sebi) and the European Securities and Markets Authority (ESMA) have signed a memorandum of understanding to strengthen cooperation and exchange of information relating to central counterparties.
The new MoU replaces an earlier agreement between Sebi and ESMA that was signed in June 2017. The agreement sets up a framework for cooperation between the two regulators on central counterparties, in line with their respective laws and regulations.
The agreement allows ESMA to rely on Sebi’s regulatory and supervisory activities while safeguarding the European Union’s financial stability. This cooperation is crucial when clearing activity has a cross-border link or when overseas entities depend on market infrastructure supervised by another regulator.
The agreement was signed by Sebi Chairman Tuhin Kanta Pandey and ESMA Chair Verena Ross. Central counterparties play a key role in market infrastructure by standing between buyers and sellers in financial market transactions and helping manage counterparty risk.
## Why it matters The agreement helps maintain engagement with overseas regulators and support confidence in the supervision of entities operating in India’s securities market ecosystem. This is particularly important for cross-border cooperation in facilitating international clearing activities.
The partnership between Sebi and ESMA demonstrates the commitment of both regulators to strengthen cooperation and exchange of information relating to central counterparties. This cooperation will facilitate cross-border cooperation in international clearing activities and maintain confidence in the supervision of entities operating in India's securities market ecosystem.
