The CCIL houses the trading platforms for sovereign bonds and derivatives. On Tuesday, yield on the 10-year benchmark bond eased 3 basis points to 7.09%. Bond prices rise when yields fall.
The market was shut on Monday for Maharashtra Day.
“Everybody knew that April 30 was the deadline and as such there has been no impact on trading today at all. It’s going to be business as usual until at least Q2 of the next year (April-June). By then, we will have clarity on penal charges as well as a potential resolution to the matter,” said a foreign bank trader.
ESMA withdrew the third country CCP recognition of six Indian central counterparties including CCIL on October 31, 2022. That meant European entities could not use the clearing and settlement services of CCIL after April 30, 2023.
The matter stemmed from the Reserve Bank of India’s (RBI) refusal to permit rights of audit and inspection over the CCIL.
Thereafter, on February 17, 2023, the national regulators of European banks – Autorite des marches financiers (AMF) and the Federal Financial Supervisory Authority (BaFIN) for the French and German banks, respectively – announced that an additional time of 18 months until October 2024 will be available for the French and German banks to comply with ESMA’s decision and terminate their membership of CCIL.
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