The Reserve Bank of India has changed the timeline for a key rule that affects the derivatives market.
From January 1, 2027, all over-the-counter (OTC) derivative transactions in India will need a Unique Transaction Identifier (UTI).
The rule was earlier set to begin on April 1, but the RBI has pushed it back by nine months after feedback from the industry.
The extension gives banks, financial institutions and market participants more time to upgrade their systems and reporting processes.
What Is Changing From 2027?
At present, OTC derivative transactions are reported to the Trade Repository managed by the Clearing Corporation of India.
These transactions include:
Rupee interest rate derivatives
Government securities forward contracts
Foreign currency derivatives
Foreign currency interest rate derivatives
Credit derivatives
Now, the RBI has made it mandatory that every such transaction must carry a Unique Transaction Identifier.
However, this rule will apply only to new contracts entered into on or after January 1, 2027.
Older contracts will not be affected.
Who Will Generate the UTI?
The RBI has clearly defined who will be responsible for generating the UTI.
The order of responsibility will be:
Central counterparty, if applicable
Electronic trading platform
Clearing member
Any entity mutually agreed upon by the counterparties
If a trade is reported without a UTI, the Trade Repository operated by the Clearing Corporation of India will generate one.
Importantly, companies cannot outsource UTI generation to third-party vendors using their own Legal Entity Identifier.
This restriction is meant to maintain transparency and control.
More Flexibility for Reporting
The RBI has also relaxed some operational aspects.
For cross-border trades that need reporting in multiple countries, participants must try to comply with foreign rules if those countries have earlier deadlines.
The deadline to submit the final UTI has been extended to five business days from the trade date.
Earlier, only two days were proposed.
If the final UTI is not immediately available, temporary or interim UTIs can be used.
Routine changes to an existing derivative contract will not require a new UTI.
But if the old contract is replaced entirely with a new one, a fresh UTI must be generated.
Detailed operational guidelines and updated reporting formats will be issued separately to support the transition.
Overall, the RBI’s move aims to improve transparency in the derivatives market while giving institutions enough time to prepare for the shift.
