The Reserve Bank of India (RBI) has signed a Memorandum of Understanding with the European Securities and Markets Authority (ESMA) during the Visit of President of the European Council and President of the European Commission to India on 27.01.2026.
First understand what is ESMA?
ESMA (European Securities and Markets Authority) is a financial regulatory body of the European Union. It was established to protect investors, ensure orderly and transparent financial markets, and maintain stability in the EU’s financial system.
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ESMA works by setting common rules for securities markets, supervising key financial institutions like credit rating agencies and trade repositories, and coordinating national market regulators across EU countries. In simple terms, ESMA acts as the market watchdog for Europe’s capital and securities markets.
What’s the purpose of MoU?
The primary objective of the MoU is to enable formal recognition of the Clearing Corporation of India Ltd. (CCIL) and other RBI-regulated Central Counterparties by ESMA.
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The MoU is a statement of intent of RBI and ESMA, with respect to the covered Central Counterparties (CCPs), and cooperation in regulatory and supervisory practices to the extent permitted by applicable laws and regulations.
RBI and ESMA will consult, cooperate and exchange information with each other with regard to the covered Central Counterparties (CCPs) and monitoring of the compliance by the covered CCPs with the recognition conditions.
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Is MoU Legal?
The MoU does not create any legally binding obligations, confer any rights or supersede any domestic laws.
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