RBI Proposes Unique Transaction Identifier for OTC Derivatives

The Reserve Bank of India plans to introduce a Unique Transaction Identifier (UTI) for all OTC market transactions in rupee interest rate and foreign currency derivatives starting April 1. This move aims at improving transparency and enabling policymakers to have a global aggregation of OTC derivatives.

The Reserve Bank of India (RBI) has announced plans to implement a Unique Transaction Identifier (UTI) for transactions in over-the-counter (OTC) markets involving rupee interest rate and foreign currency derivatives. Slated to start in the next financial year on April 1, this initiative seeks to bolster transparency and oversight in the financial landscape.

A draft circular titled 'UTI for OTC Derivative Transactions in India' was issued by the RBI on Thursday. OTC derivatives are contracts negotiated directly between two parties, bypassing regulated exchanges. Accompanying the UTI is the Legal Entity Identifier (LEI), a 20-character code uniquely identifying transaction counterparties.

The RBI underscores that UTIs are crucial for globally aggregated market data, providing policymakers with comprehensive insights into OTC derivatives. Comments on the proposal are being solicited until November 14, 2025, with banks, market participants, and other stakeholders encouraged to contribute their perspectives.

(With inputs from agencies.)