Master Direction On Unique Identifiers In Financial Markets, 2026

Reserve Bank of India (“RBI”) has issued the Master Direction – Reserve Bank of India (Unique Identifiers in Financial Markets) Directions, 2026, (“Master Direction”) vide Notification No. FMRD.MIOD.9/11.01.057/2025-26 dated March 27, 2026. This Master Direction has consolidated the following list of circulars:

a) FMRD.FMID.No.14/11.01.007/2016-17 dated June 01, 2017

b) FMRD.FMID.No.10/11.01.007/2018-19 dated November 29, 2018

c) FMRD.FMID.No.15/11.01.007/2018-19 dated April 26, 2019

d) FMRD.FMID.No.24/11.01.007/2019-20 dated March 27, 2020

e) CO.FMRD.MIOD.No.8/11.01.057/2025-26 dated February 18, 2026

and streamlined the regulatory framework for the implementation of two critical global identifiers: the Legal Entity Identifier (“LEI”) and the Unique Transaction Identifier (“UTI”).

Dual Implementation Timeline

The Master Direction adopts a dual phased implementation approach with distinct timelines for the two identifier systems:

a) LEI: Effective from March 27, 2026

b) UTI: Effective from January 1, 2027

LEI Framework

RBI has laid down a comprehensive framework governing the implementation and usage of LEI for participants in financial markets. It is a 20-character unique identity code assigned to entities who are parties to a financial transaction. It is seen as a key measure to improve the quality and accuracy of financial data systems for better risk management and is applicable to the following transactions:

a) All OTC transactions undertaken by entities other than individuals in the markets for:

i. Government securities;

ii. Money market instruments;

iii. Foreign exchange instruments and

iv. Derivatives covered under section 45U of Chapter III-D of the RBI Act, 1934

b) For non-derivative foreign exchange transactions which involve an amount equivalent to or exceeding USD one million or equivalent thereof in other currencies

RBI has strengthened the framework for implementation of the LEI across financial markets, mandating that all resident and non-resident participants obtain an LEI from a Local Operating Unit (“LOU”) which is accredited by Global Legal Entity Identifier Foundation, and in cases where LOU is in India it should be recognised by RBI as an issuer of LEI under the Payment and Settlement Systems Act, 2007. For non-resident participants that do not constitute separate legal entities in their home jurisdiction (such as certain Foreign Portfolio Investors) they may rely on the LEIs of their parent or management entity.

Intermediaries and the market infrastructure institutions regulated by the RBI are required to maintain LEI details of all the transacting parties in their records. Entities without a valid and “current” LEI will be barred from undertaking transactions in RBI-regulated financial markets, underscoring the importance of timely registration and compliance with global LEI maintenance requirements.

UTI Framework

UTI is a single, standardised reference number that is given to each OTC derivative transaction. It functions as a digital fingerprint for a transaction. Every time two parties enter into an OTC derivative contract, the transaction is assigned a UTI. This ensures that the transaction can be tracked, reported, and examined accurately across systems.. It will have a maximum of 52 characters comprising the LEI of the generating entity followed by a unique identifier and shall be unique for each derivative transaction throughout its lifecycle.

UTI shall be applicable to all OTC derivative transactions falling under the following directions as amended from time to time:

a) Foreign Exchange Management (Foreign Exchange Derivative Contracts) Regulations, 2000 and Master Direction – Risk Management and Inter-Bank Dealings

b) Master Direction – Reserve Bank of India (Rupee Interest Rate Derivatives) Directions, 2025

c) Reserve Bank of India (Forward Contracts in Government Securities) Directions, 2025

d) Master Direction – Reserve Bank of India (Credit Derivatives) Directions, 2022

The Master Direction prescribes a structured “waterfall mechanism” for determining the UTI generating entity. Under this mechanism, responsibility is sequentially assigned and passes to the next entity where the identified entity is unable or unwilling to generate the UTI. For transactions reported without a UTI to Clearing Corporation of India Limited – Trade Repository (“CCIL-TR”), CCIL-TR will act as the ultimate backstop for the generation of the UTI for that particular transaction.

For transactions reportable only in India, the UTI is to be generated first by the Central Counterparty (“CCP”) where it is a counterparty, followed by the Electronic Trading Platform (“ETP”), and thereafter by an entity mutually agreed between the counterparties, and then with CCIL-TR acting as the final fallback.

For cross-border transactions, the sequence additionally includes the clearing member (where it is a counterparty), positioned in between the CCP and the ETP and where a foreign jurisdiction has an earlier reporting timeline, the UTI is to be generated in accordance with that jurisdiction’s requirements; otherwise, the counterparties may mutually agree on the generating entity. In all cases, CCIL-TR acts as the ultimate fallback for UTI generation.

In the case of cross-border transactions where the foreign jurisdiction prescribes an earlier reporting timeline, market participants are expected to make reasonable efforts to obtain and report the UTI within the applicable timeline. Where this is not feasible, UTI may be obtained and submitted to CCIL-TR at the earliest opportunity, mandatorily within five Mumbai business days from the transaction date. Any UTI initially reported by market participant or generated by CCIL-TR on a temporary basis shall be treated as an interim UTI.

Amendments made to a derivative contract after reporting do not require the generation of a new UTI, but in cases where novation or a similar lifecycle event results in a new reportable derivative contract, a fresh UTI must be generated.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.