RBI Mandates Global Identifiers for Financial Transparency

The Reserve Bank of India (RBI) has introduced new regulations mandating the use of Legal Entity Identifier (LEI) and Unique Transaction Identifier (UTI) to enhance transparency in financial markets. According to the central bank, these global standards are essential for maintaining transparency and accountability.

The LEI, a 20-character code, will be required for all over-the-counter (OTC) transactions by entities other than individuals in Government securities, money market instruments, foreign exchange, and derivatives markets. For non-derivative foreign exchange transactions, the LEI code is mandatory for amounts equaling or exceeding USD one million or its equivalent in other currencies.

Additionally, UTI will be necessary for all OTC derivative transactions conducted under Governing Directions, starting on or after the directives' implementation date. This identifier, dictated by the CPMI-IOSCO guidelines, will be unique throughout a transaction's lifecycle and must follow specific technical guidance. UTI's regulations will be active from January 1, 2027.