RBI to Mandate Unique Transaction Identifier for OTC Derivative Transactions

• RBI proposes mandatory use of Unique Transaction Identifier (UTI) for all OTC derivative transactions.
• The rule will take effect from April 1, 2026, ensuring transparency and traceability.
• UTI generation will follow global standards set by CPMI and IOSCO.

The Reserve Bank of India (RBI) has proposed a new framework to make the use of Unique Transaction Identifiers (UTIs) mandatory for all over-the-counter (OTC) derivative transactions starting April 1, 2026. The move aims to improve transparency, standardization, and global comparability in India’s derivative markets.

According to the draft circular, UTIs will be created based on the technical guidance issued by the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO). Each UTI will consist of up to 52 characters, combining the Legal Entity Identifier (LEI) of the generating entity with a unique code, and will remain the same throughout the lifecycle of a transaction.

The RBI explained that UTIs are globally recognized identifiers designed to give regulators a unified view of derivative markets, helping track and assess systemic risks. The mandate will apply to all OTC markets involving rupee interest rate derivatives, forward contracts in government securities, foreign currency derivatives, foreign currency interest rate derivatives, and credit derivatives.

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To manage responsibility for generating UTIs, the RBI will use a 'waterfall table' approach, assigning priority to specific entities. If one entity cannot generate a UTI, the responsibility will move sequentially to the next in line.

This initiative aligns India’s market reporting standards with international best practices and supports better oversight of complex financial instruments.

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