Euroclear and The Clearing Corporation of India Limited (CCIL) have signed a memorandum of understanding 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 long-term, cooperative relationship.
Future 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. Arrangements for the potential settlement of trades in Indian securities between CCIL and the bank’s clients will also be discussed.
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 expertise in securities settlement and related services involving securities from over 30 markets worldwide is intended to assist the CCIL and the Indian capital markets in furthering their modernisation agenda.
Dr RH Patil, chairman, CCIL, believes the 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,” says Dr Patil. “Our skilled capital-market workforce also stands to benefit from joint training possibilities scheduled in different locations on the subcontinent in 2007.”
Today, non-domestic institutional investors account for around 70% of total foreign investment in India, which represents approximately ?7 billion of net inflows annually.
Martine Dinne, chief executive officer, Euroclear Bank, expects the collaboration with CCIL to further support the trend of foreign investment flowing into India. “India is predicted to become one of the top five economies in the world,” says Dinne. “We have a lot to share with our industry colleagues in India, and likewise, we look forward to gaining a better understanding of CCIL’s interests.”