RBI proposes to mandate UTI for all OTC derivative transactions

Mumbai: The Reserve Bank has proposed to mandate a Unique Transaction Identifier (UTI) for all transactions in OTC markets for rupee interest rate and foreign currency derivatives from the next financial year, beginning April 1.

In this regard, the central bank on Thursday released a draft circular on 'UTI for OTC Derivative Transactions in India'.

Over-the-Counter (OTC) derivatives are financial derivative contracts that are traded directly between two parties rather than on a regulated exchange.

The LEI is a 20-character unique identity code assigned to entities that are parties to a financial transaction.

UTI will have a maximum of 52 characters consisting of LEI of the generating entity, followed by a unique identifier and shall be unique to a derivative transaction throughout its lifecycle, according to the proposals.

"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," the draft said.

The UTI has been conceived as one of the key data elements identified globally for reporting over-the-counter (OTC) derivative transactions with a view to enabling policymakers to obtain a comprehensive view of the OTC derivatives market.

Market participants will ensure that necessary measures are put in place to ensure compliance with these instructions, said the draft.

The RBI has invited comments on the draft from banks, market participants and other interested parties by November 14, 2025.

While the LEI uniquely identifies the counterparties to an OTC derivative transaction, the UTI serves as a single unique reference number for a transaction.

It enables policymakers to obtain a comprehensive view of OTC derivatives markets by facilitating global aggregation of transactions.

The reporting of LEI has been mandated for OTC derivative transactions in most major jurisdictions globally.

The RBI said UTI has also been implemented/is in the process of being implemented in many of the major jurisdictions.

In India, LEI has already been implemented