The Bank of England has provided a timeline extension until October 30, 2026, for three Indian clearing houses to establish an inspection framework in line with UK standards. The institutions benefiting from this extension are the India International Clearing Corporation Limited, the NSE Clearing Limited, and the NSE IFSC Clearing Corporation Limited. As per a document dated September 28, these clearing houses have now entered the run-off regime from the UK's Temporary Recognition Regime (TRR) and will be eligible to apply for recognition under the standard process once their term in this regime concludes.
This decision is particularly beneficial for UK-based banks such as Standard Chartered (OTC:SCBFF) Bank, HSBC, and Barclays (LON:BARC). These institutions will now have an advantage over their European counterparts like Societe Generale (OTC:SCGLY), Credit Agricole (OTC:CRARY), BNP Paribas (OTC:BNPQY), and Deutsche Bank (ETR:DBKGn) in managing investment flows to India.
This development comes at a crucial time following the de-recognition of six Indian clearing houses by the European Securities and Markets Authority (ESMA) in October 2022. This decision by ESMA is set to take effect from April 30, 2023. The recent move by the Bank of England provides a significant relief to the aforementioned three Indian clearing houses amidst the regulatory changes happening across Europe.
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