SEBI Signs MoU With Bank of England to Strengthen Oversight

SEBI and the Bank of England sign an MoU to strengthen regulatory cooperation and information sharing on clearing corporations, support cross-border supervision and safeguard financial stability.

The Securities and Exchange Board of India (SEBI) has signed a memorandum of understanding (MoU) with the Bank of England (BoE) to strengthen regulatory cooperation and facilitate information sharing concerning SEBI-recognised clearing corporations. The agreement establishes a framework for cross-border supervision and aims to support financial stability while enabling closer coordination between the Indian and UK regulators.

The MoU provides a mechanism for both authorities to cooperate on matters related to central counterparties (CCPs), in accordance with their respective laws and regulatory frameworks. It also allows the Bank of England to place reliance on SEBI’s regulatory and supervisory activities while safeguarding the stability of the UK financial system.

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The arrangement is intended to improve coordination between the regulators as financial markets and clearing activities become increasingly interconnected across national borders. Information exchange and regulatory cooperation can help authorities better understand risks, coordinate supervisory responsibilities and support the effective functioning of financial market infrastructure.

Clearing corporations play a significant role in capital markets by managing counterparty risks between buyers and sellers and helping ensure that transactions are settled in an orderly manner. They act as intermediaries in the clearing process, reducing the risk that one party’s failure to meet its obligations disrupts other market participants. Effective supervision of these institutions is therefore important for maintaining investor confidence and financial system resilience.

The MoU establishes a framework under which the Bank of England can take SEBI’s existing oversight processes into account, subject to the terms of the agreement and applicable legal requirements. It also reinforces the role of cooperation between regulators in addressing challenges that arise when clearing activities involve participants and institutions across different jurisdictions.

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The agreement comes amid broader efforts by Indian and UK financial authorities to strengthen regulatory engagement and deepen cooperation in financial services. By formalising information-sharing arrangements related to clearing corporations, SEBI and the Bank of England seek to support cross-border market operations while ensuring that their respective regulatory responsibilities remain aligned with domestic laws.

The MoU marks a further step in regulatory coordination between India and the UK, with a focus on effective supervision, risk management and the stability of financial markets.