UTI Set to Transform OTC Derivatives Reporting by 2027

The Reserve Bank of India mandates Unique Transaction Identifier (UTI) for rupee interest rate and foreign currency derivatives starting January 1, 2027. Aiming to enhance OTC derivatives market transparency, this move allows policymakers to gain a comprehensive view of these financial transactions.

The Reserve Bank of India (RBI) announced that Unique Transaction Identifiers (UTIs) will become a requirement for all direct private trades in rupee interest rate and foreign currency derivatives, effective January 1, 2027. This decision marks a significant step in enhancing transparency in the over-the-counter (OTC) derivatives market.

The UTI requirement is poised to be one of the globally recognized key data points for reporting these transactions. This development will allow policymakers a comprehensive view of the OTC derivatives market. Presently, these transactions are reported to the Clearing Corporation of India Limited's Trade Repository (CCIL-TR).

Initially slated for an April 1 rollout, the RBI postponed the mandate to give market participants adequate time to establish the necessary technical infrastructure. The UTI will include up to 52 characters, featuring the Legal Entity Identifier (LEI) of the issuer followed by a unique identifier.

(With inputs from agencies.)