EU fin regulator action may hit forex, interest swap market

The decision by the European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, to derecognise six Indian central counterparties (CCPs) could lead to disruptions in the foreign exchange and interest rate swap market. The equity market, however, will mostly remain unaffected, sources said. CCPs are mandated in some financial transactions to eliminate the risk of counterparty default.

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