The Reserve Bank of India has granted the status of a Qualified Central Counterparty (QCCP) to Clearing Corporation of India Ltd. (CCIL).
As per the provisions by the Basel Committee, a QCCP is as “an entity that is licensed to operate as a CCP (including a license granted by way of confirming an exemption), and is permitted by the appropriate regulator/overseer to operate as such with respect to the products offered.” Plus, the CCP needs to be subjected to, on an on-going basis, rules and regulations that are consistent with the Principles for Financial Market Infrastructures (PFMIs) issued by the Committee on Payment and Settlement Systems (CPSS) and International Organisation of Securities Commissions (IOSCO).
CCIL follows both of these provisions, as it is authorized and supervised by the Reserve Bank of India and is subjected to the PFMIs. As a member of the Financial Stability Board (FSB) and CPSS, the Reserve Bank of India says it is committed to the adoption and implementation of the PFMIs.
Also, in order to qualify as a QCCP, the CCP needs to make data available or calculate the required data for the Basel Committee’s capital requirements. Capital requirements for QCCPs are more favorable than they are for non-qualifying CCPs. For example, with trade related exposure, QCCPs have a risk weight of 2%, whereas under Basel III, a non-qualifying CCP would have a risk weight of at least 20% if the CCP is a bank or 100% if it is a corporate financial institution.
Clearing Corporation of India Receives QCCP Status
The Reserve Bank of India has granted the status of a Qualified Central Counterparty (QCCP) to Clearing Corporation of India Ltd. (CCIL).