India International Clearing Corporation (IFSC) Limited (India ICC), a CARE ‘AAA (Is)’ rated clearing corporation, commenced operations from January 16, 2017 at the IFSC, GIFT City, Gandhinagar. It provides clearing & settlement, risk management and collateral management services to the India International Exchange (IFSC) Limited (India INX), at the IFSC, Gift City.
India ICC had applied to the European Securities and Markets Authority (ESMA) to be recognised as a Third – Country Central Counter Party (TC-CCP) in accordance with the European Market Infrastructure Regulation (“EMIR”). ESMA is an independent European Union financial regulatory and supervisory authority that contributes to safeguarding the stability of the European Union’s financial system by enhancing the protection of investors and promoting stable and orderly financial markets.
EMIR was adopted by the European Parliament on July 4, 2012 and entered into force on August 16, 2012. Under EMIR, a CCP not established in the European Union may provide clearing services to clearing members or trading venues established in the European Union only if it is recognised by ESMA TC-CCP. A TC-CCP recognised under the EMIR process also receives the Qualified Central Counterparty (“QCCP”) status across the European Union.
A QCCP member is subjected to lower capital requirements/charges under the Basel III Framework introduced by the Basel Committee on Banking Supervision. A European clearing member registered with a QCCP like India ICC will benefit from the application of concessional risk weightings to their group’s novated exposures to QCCPs.
ESMA has notified India ICC regarding the completion of its application to be recognised as a TC-CCP vide and that ESMA would now process the application for granting recognition to India ICC as a TC-CCP.
