New Delhi, Sep 4 (SocialNews.XYZ) India's market regulator, the Securities and Exchange Board of India (SEBI), said on Friday it had signed a memorandum of understanding with the European Securities and Markets Authority (ESMA) on cooperation and exchange of information relating to central counterparties (CCPs).
The agreement replaces an earlier MoU signed by the two regulators on June 21, 2017, SEBI said in a statement.
The MoU establishes a framework for cooperation between SEBI and ESMA regarding CCPs regulated and supervised by SEBI, in line with their respective laws and regulations.
It also enables ESMA to place reliance on SEBI's regulatory and supervisory activities while safeguarding the financial stability of the European Union, SEBI said.
The agreement demonstrates the importance of cross-border cooperation in facilitating international clearing activities, it added.
The pact was signed by SEBI Chairman Tuhin Kanta Pandey and ESMA Chair Verena Ross.
CCPs are financial market infrastructures that stand between buyers and sellers in transactions, helping manage counterparty risk and support the clearing of trades.
Earlier in September, the Securities and Exchange Board of India (SEBI) proposed allowing mutual fund schemes to net certain cash-market fund obligations to reduce temporary funding requirements and improve settlement efficiency for institutional investors.
Under the proposed framework, a mutual fund scheme would be allowed to offset eligible outright purchases against eligible outright sales within the same settlement cycle. However, the underlying securities would continue to be settled on a gross basis, ensuring that the delivery-backed nature of institutional trades remains unchanged.
The market regulator has invited public comments on the proposal by September 24, according to a consultation paper.
Mutual fund schemes can face temporary liquidity requirements and operational inefficiencies because cash obligations in the cash market are currently settled on a gross basis at the scheme level, SEBI said.
Source: IANS
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