Prior to the issuance of the Master Direction Reserve Bank of India (Unique Identifiers in Financial Markets) Directions, 2026, the framework for Legal Entity Identifier (LEI) and Unique Transaction Identifier (UTI) in India was governed through multiple fragmented circulars and lacked a unified regulatory structure, particularly with no formal domestic mandate for UTI in OTC derivatives. This led to issues such as inconsistency in adoption, lack of standardisation, regulatory reporting gaps, and challenges in tracking transactions and assessing systemic risk, especially in cross-border markets requiring alignment with global standards. To address these concerns, the Reserve Bank of India has introduced a consolidated framework mandating LEI for all non-individual entities undertaking specified OTC transactions (with thresholds for certain forex deals) and barring entities without valid LEI from participating in RBI-regulated markets, while also introducing a comprehensive UTI regime (effective January 1, 2027) aligned with CPMI-IOSCO standards, including structured generation rules, a waterfall mechanism for identifying the generating entity, lifecycle tracking, and designation of CCIL-TR for reporting and fallback generation, thereby enhancing transparency, data quality, and risk monitoring in financial markets.
Link – https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13343&Mode=0
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