What is the RBI-ESMA standoff?
Nov 14, 08:11

The European Union's financial market regulator, European Securities and Markets Authority (ESMA), has proposed derecognising six Indian counterparty clearing corporations (CCPs) from April 30, 2023. ESMA said this was due to non-compliance with certain provisions of the European Market Infrastructure Regulation. Because of this, European banks will not be able to clear or settle trades in foreign exchange, gilts, currency, and interest rate derivatives done on Indian exchanges. The RBI, SEBI and IFSCA believe this may lead to ceding regulatory ground to an authority that is exercising extraterritorial jurisdiction over the activities of Indian CCPs and fear other countries could follow suit.