Unique transaction ID to be must for OTC derivatives deals: RBI

Mumbai: The Reserve Bank of India has mandated the use of a unique transaction identifier (UTI) for all over-the-counter (OTC) derivative transactions. Under the new framework, announced by the RBI on Wednesday, every eligible OTC derivative trade will be required to carry a UTI that remains constant throughout the lifecycle of a contract. The framework will be applicable from January 1, 2027

This is expected to improve traceability, aggregation and systemic risk monitoring of OTC derivatives. CCIL is expected to issue detailed operational guidelines in due course, the RBI said, while market participants have been asked to upgrade systems to ensure compliance.

OTC transactions include FX derivatives, rupee interest rate derivatives, forward contracts in government securities, credit derivatives or any other OTC derivatives specified by RBI in future. the most common derivative transactions include FX derivatives and Rupee interest rate derivatives

FX derivatives include FX forwards, FX swaps – are used for hedging currency exchange rates. Rupee interest rate derivatives include overnight index swaps, MIBOR-linked swaps used for managing duration and repricing risks in bonds. The RBI had issued a draft on UTI in October 2025.

Until now, while OTC derivative transactions were mandatorily reported to the trade repository operated by the Clearing Corporation of India, there was no requirement for a common transaction identifier. Market participants relied on internal deal numbers or repository-generated references, which were often inconsistent across counterparties and jurisdictions, complicating aggregation and cross-border supervision.

Responsibility for generating the UTI will follow a waterfall mechanism, starting with central counterparties or electronic trading platforms where applicable, and falling back on CCIL’s trade repository if no other entity generates it.

The central bank clarified that routine amendments to derivative contracts will not require a new UTI, though lifecycle events such as novations that create a new reportable trade will trigger fresh identifiers.