SEBI signs MoU with Bank of England on clearing corporations
Why in the news
The Securities and Exchange Board of India (SEBI) announced on 28 October 2026 that it has signed a memorandum of understanding with the Bank of England (BoE) on clearing corporations recognised by SEBI.
Key facts
- Parties: SEBI, India’s capital market regulator, and the Bank of England, the UK central bank.
- Subject: cooperation and exchange of information relating to SEBI-recognised clearing corporations.
- Central counterparties (CCPs): the MoU creates a framework for cooperation on CCPs and supports cross-border clearing activity.
- Reliance: the BoE can depend on SEBI’s regulatory and supervisory work, while still protecting the financial stability of the UK.
- Legal frameworks: both regulators cooperate under their own laws; oversight stays with each jurisdiction.
- The announcement was SEBI press release PR No. 66/2026.
About clearing corporations
A clearing corporation stands between buyers and sellers in a trade and makes sure that deals are settled and that every participant meets its obligations. Because it takes on the counterparty role for both sides, it is also called a central counterparty. When market activity crosses borders, regulators in different countries need formal arrangements to share information and supervise such entities.
Exam angle
- Remember the pairing: SEBI with the Bank of England, not with the UK Financial Conduct Authority.
- Clearing corporation = central counterparty (CCP); it guarantees settlement of trades.
- Key idea is supervisory reliance: a foreign regulator relies on the home regulator’s oversight.
- Each regulator retains authority under its own legal framework.