RBI proposes to make use of UTI mandatory for OTC derivative transactions

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The Reserve Bank of India (RBI) on Thursday proposed to make the use of a unique transaction identifier (UTI) mandatory for all over-the-counter (OTC) derivative transactions by market participants, effective April 1, 2026.

 

According to the draft circular released by the RBI, the UTI for OTC derivative transactions will be generated in line with the UTI Technical Guidance issued by the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) in February 2017.

 

Each UTI will be up to 52 characters long, comprising the legal entity identifier (LEI) of the generating entity followed by a unique identifier, and will remain unique to a derivative transaction throughout its lifecycle.

 

“The UTI has been conceived as one of the key data elements identified globally for reporting OTC derivative transactions with a view to enable policy makers to obtain a comprehensive view of the market,” the RBI said in a release.

 

 “It has been decided to implement UTI for all transactions in OTC markets for rupee interest rate derivatives, forward contracts in Government securities, foreign currency derivatives, foreign currency interest rate derivatives, and credit derivatives in India. A framework for the implementation of UTI for OTC derivative transactions,” it added.

 

The RBI stated that the UTI-generating entity will be determined based on a “waterfall table,” which assigns the responsibility for UTI generation in a sequential manner, passing it to the next entity in the hierarchy if the designated entity is unable or unwilling to generate the UTI.

 

The UTI will apply to all transactions in the OTC markets for rupee interest rate derivatives, forward contracts in government securities, foreign currency derivatives, foreign currency interest rate derivatives, and credit derivatives in India, according to the RBI’s draft circular on UTIs for OTC derivative transactions.