RBI Postpones UTI Requirement for OTC Derivative Transactions to January 2027

The Reserve Bank of India (RBI) has postponed the implementation of the Unique Transaction Identifier (UTI) framework for over the counter (OTC) derivative transactions to 1 January 2027. The earlier proposal had set the rollout date as 1 April 2026. 

As per the news reports, the central bank said the extension follows feedback from market participants, who sought more time to build systems after the release of revised reporting formats and operational guidelines. 

Scope of the Requirement 

The UTI framework will apply to new OTC derivative transactions executed on or after the effective date. Existing contracts will not be required to obtain a UTI. 

The mandate will cover rupee interest rate derivatives, forward contracts in government securities, foreign currency derivatives, foreign currency interest rate derivatives, and credit derivatives. 

Purpose of the Identifier 

A UTI is a globally recognised reference number assigned to each derivative trade. It allows regulators to track transactions across markets and monitor overall exposures. 

India already uses the Legal Entity Identifier (LEI) to identify counterparties. The UTI will serve as the reference number for individual transactions, aligning domestic reporting practices with global standards. 

Generation and Reporting Rules 

The RBI has retained the proposed “waterfall” approach to determine which entity generates the UTI. The framework does not mandate a single platform to issue identifiers, allowing counterparties to follow the prescribed hierarchy or agree mutually. 

Delegation of UTI generation to a vendor, where the identifier carries the vendor’s LEI, will not be permitted. 

Reporting Timelines and Operational Changes 

Market participants will have up to 5 business days from the transaction date to report the final UTI, compared with the earlier 2-day proposal. If the final identifier is not available, a temporary UTI may be reported to the trade repository. 

Changes to contract details will be treated as updates and will not require a new UTI. However, lifecycle events such as novation that result in a new reportable contract will require a fresh identifier. 

The Clearing Corporation of India Limited is expected to release revised reporting formats and detailed guidelines for the framework. 

Read More: RBI Revises External Commercial Borrowing Rules, Removes Cost Cap! 

Conclusion  

With the timeline extended to 2027, the UTI requirement will apply only to new OTC derivative trades executed after the effective date. The RBI has asked CCIL to issue updated reporting formats and guidelines. 

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