What changed
RBI released a revised set of Directions for Central Counterparties (CCPs) on October 28, 2024, superseding the earlier directions dated June 12, 2019. The updated directions are based on a periodic review and are detailed in the annex to the circular. The previous 2019 directions stand repealed.
What it means for you
Banks and lenders that use CCP services must ensure their counterparties comply with the new governance, capital and recognition norms. The updated framework changes governance requirements, board composition, capital requirements and the process for recognising foreign CCPs. Institutions should review their agreements and risk assessments with CCPs to align with the revised directions.
What you must do
- Review the updated Directions for CCPs to understand changes in governance, capital, and recognition requirements.
- Assess your exposure to domestic and foreign CCPs and ensure they are compliant with the new framework.
- Update internal policies and risk management procedures to reflect the revised CCP directions.
- Coordinate with your legal and compliance teams to align contracts and agreements with the updated rules.
Who it affects
Domestic central counterparties authorised by RBI, Foreign central counterparties seeking recognition in India, Banks and financial institutions that are users of CCP services, Clearing members and system participants
What is the effective date of the new CCP directions?
The updated Directions for Central Counterparties were issued on October 28, 2024, and replace the earlier June 12, 2019 directions from that date.
Do the new directions apply to foreign CCPs?
Yes, the directions apply to both domestic CCPs authorised in India and foreign CCPs recognised by RBI for their operations in India.
What key areas are covered in the updated directions?
The directions cover governance requirements for domestic CCPs, including board composition, definitions, and likely capital and recognition frameworks as per the annex.