Clearing Corporation of India Limited (CCIL)

The Reserve Bank of India (RBI) has signed a Memorandum of Understanding (MoU) with the European Securities and Markets Authority (ESMA) during the recent visit of the President of the European Council and the President of the European Commission to India.

According to the Ministry of Finance, the primary objective of the MoU is to facilitate the formal recognition of the Clearing Corporation of India Limited (CCIL) and other RBI-regulated Central Counterparties (CCPs) by ESMA. The agreement comes into effect from the date of signing and will remain operative for an unlimited period.

Significance of the MoU

The MoU is expected to strengthen regulatory cooperation between India and the European Union, enhance cross-border financial market integration, and support systemic stability by enabling smoother recognition and oversight of CCPs operating across jurisdictions.

About CCIL

• Established in 2001, the Clearing Corporation of India Limited (CCIL) functions as a central counterparty (CCP) providing clearing and settlement services for a wide range of financial instruments, including:
  • Government securities
  • Money market instruments
  • Foreign exchange transactions
  • Over-the-counter (OTC) derivatives
• CCIL is authorised by the RBI as a Payment System Operator and aims to enhance efficiency, safety and financial stability by mitigating counterparty and settlement risks.
• In 2014, CCIL was recognised by the RBI as a Qualified Central Counterparty (QCCP).

Key Functions and Services

• Provides guaranteed settlement as well as non-guaranteed settlement services for rupee interest rate derivatives.
• Facilitates cross-currency transactions through the CLS Bank.
• Through its “SARVAM” platform, CCIL offers valuation, margining, collateral management, margin maintenance and risk analytics services for Non-Centrally Cleared Derivatives (NCCDs).
• Offers portfolio compression services for non-cleared rupee interest rate swaps and cleared forex forward derivative transactions.

Pioneering Role

• In 2007, CCIL established India’s first trade repository for OTC derivatives, ahead of the regulatory push following the Global Financial Crisis (GFC).
• It now operates trade repositories for interest rate, credit and foreign exchange derivatives, as well as money market instruments such as Certificates of Deposit (CDs) and Commercial Papers (CPs).