SEBI signs MoU with Bank of England to strengthen clearing corporation oversight

SEBI and Bank of England sign pact on clearing corporations

The Securities and Exchange Board of India (SEBI) has signed a Memorandum of Understanding (MoU) with the Bank of England to enhance cross-border supervisory cooperation and information sharing regarding SEBI-recognised clearing corporations.

Under the bilateral agreement, the Bank of England can place reliance on SEBI’s regulatory and supervisory activities for central counterparties, while continuing to safeguard the United Kingdom’s financial stability. The pact establishes a formal mechanism for both central regulators to coordinate on market infrastructure operating across their respective jurisdictions.

SEBI said in an official circular that the framework aligns regulatory responsibilities with applicable laws and ensures seamless communication on clearing activities with international dimensions.

What the MoU covers

Clearing corporations act as central counterparties in financial markets, standing between buyers and sellers to guarantee trade settlements and manage counterparty default risks. As cross-border financial transactions grow, supervisory alignment between major global regulators becomes vital for market integrity.

The MoU sets out clear terms for information exchange and regulatory reliance. Key elements of the framework include:

By establishing that the Bank of England can rely on SEBI's supervisory oversight, the framework highlights international trust in India’s market infrastructure and robust regulatory rigour.

Strengthening international market confidence

The agreement marks a substantial step forward in financial cooperation between India and the UK. International clearing activities require robust oversight to manage systemic risk without creating unnecessary operational friction for market participants.

SEBI noted that cross-border coordination plays an important role in supporting market infrastructure and maintaining investor confidence. The mutual framework ensures that both regulators can fulfill their statutory duties under their respective national legal frameworks while upholding global financial stability.

By cementing this regulatory alignment, India continues to solidify its reputation as a well-governed, world-class destination for global financial flows.