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Euroclear and The Clearing Corporation of India Limited (CCIL) announced today the signing of a Memorandum of Understanding (MOU) regarding post-trade processing collaboration. Both companies have penned a non-binding agreement to explore the possibility of closer ties, aimed at building and nurturing a longterm, co-operative relationship.
Talks are expected to cover the feasibility of a communications gateway between CCIL, the local central securities depository (CSD) in India, and Euroclear Bank, the international CSD. Furthermore, arrangements for the potential settlement of trades in Indian securities between CCIL and Euroclear Bank clients will also be open to discussion.
Martine Dinne, Chief Executive Officer of Euroclear Bank, said, “We have a lot to share with our industry colleagues in India, and likewise, look forward to gaining a better understanding of CCIL’s interests. Our collaboration with CCIL could further support the established trend of foreign investment flowing into India – a market that is predicted to become one of the top five economies in the world.”
Dr. R.H. Patil, Chairman of CCIL, stated, “We are enthusiastic that this arrangement could provide access to certain Euroclear services for current CCIL users, and vice versa. For example, we will be exploring how an Indian bank client would be able to use its CCIL interface in the future to route cross-border settlement instructions to and from Euroclear Bank. Furthermore, our skilled capital-market workforce stands to benefit from joint training possibilities scheduled in different locations on the subcontinent in 2007.”
The primary objective of the CCIL, since its creation in 2001, is to ensure the safe and efficient clearing and settlement of trades in Indian government securities and T-bills. Euroclear’s long tradition and expertise in securities settlement and related services involving securities from over 30 markets worldwide will assist the CCIL and the Indian capital markets in furthering their modernisation agenda started in the 1990s. Today, non-domestic institutional investors account for around 70% of total foreign investment in India, which represents approximately EUR 7 billion of net inflows annually.
The Euroclear group includes Euroclear Bank, the international central securities depository based in Brussels, as well as Euroclear Belgium, Euroclear France, Euroclear Nederland and CRESTCo, the central securities depositories of Belgium, France, the Netherlands, and the UK and Ireland, respectively. Euroclear recently acquired EMXCo, the UK’s leading provider of investment-fund order routing. The total value of securities transactions settled by the Euroclear group is in excess of EUR 350 trillion per annum, while assets held for clients are valued at more than EUR 15 trillion. Euroclear Bank is rated AA+ by Standard & Poor's and Fitch Ratings.
The Clearing Corporation of India Ltd. (CCIL) was set up in 2001 by Indian banks and
financial institutions to create an institutional structure for clearing and settlement in the
money-markets, government securities and foreign-exchange markets. It has brought about
a high level of efficiency in the transaction-settlement process so as to insulate the
financial system from shocks emanating from operations-related issues.
CCIL acts as a central counterparty by providing guaranteed settlement to market
participants for their transactions in the money-markets, government securities and foreignexchange
markets. CCIL’s total turnover during 2006 was equivalent to over EUR 2.6
trillion. CCIL has been in the forefront of developing new products, providing new
technology solutions in the form of developing and managing anonymous Order Matching
Systems, providing value-added research input through its publications, supporting
knowledge development for its stakeholders by conducting a large number of training
programmes, etc.
