These identifiers are key global standards to promote transparency in financial markets, the central bank said in a release.
An LEI code is a 20-character unique identification code assigned to entities that are parties to financial transactions. According to the notification, the code will apply to all OTC transactions undertaken by entities other than individuals in markets for government securities, money market instruments, foreign exchange instruments and derivatives.
For users/clients doing non-derivative foreign exchange transactions, the LEI code will be applicable only for transactions involving USD 10 lakh or its equivalent in other currencies or above, the central bank said.
Additionally, a UTI is a unique identifier assigned to an OTC derivative transaction.
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A UTI is required to be generated or reported for all transactions in the OTC derivatives market conducted in terms of the governing guidelines, and will apply to OTC derivatives transactions entered into on or after the date the guidelines come into force.
The central bank said the UTI has to be generated in accordance with the UTI Technical Guidance issued by the Center for Payments and Market Infrastructures (CPMI) – International Organization of Securities Commissions (IOSCO) in February 2017.
It will consist of a maximum of 52 characters including the LEI of the generating entity, followed by a unique identifier and will be unique to the derivative transaction throughout its lifetime.
The directives on LEI will come into force with immediate effect and UTI will come into effect from January 01, 2027, the central bank said.
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