In News:

To combat rising cyber frauds and impersonation in the securities market, the Securities and Exchange Board of India (SEBI) has announced a verified Unified Payments Interface (UPI) ID system for all SEBI-registered market intermediaries. This mechanism, developed in coordination with the National Payments Corporation of India (NPCI), will be effective from October 1, 2025, and is part of SEBI’s broader agenda to enhance investor security and transparency.

Key Features:

• Exclusive UPI IDs: Only SEBI-registered intermediaries will be issued validated UPI IDs featuring a structured format: username.category@validBank. For example, a broker ABC Ltd using XYZ Bank would have the UPI ID: abc.brk@validXYZ.
• Category-Specific Suffixes:
  • .brk for stock brokers
  • .mf for mutual funds
• Authentication Visual Cue: Transactions with verified UPI IDs will display a “thumbs-up inside a green triangle” icon for easy identification by investors.

Role of NPCI

NPCI, which owns and operates the UPI platform, will exclusively allocate the “@valid” handles for payment collection by SEBI-registered intermediaries. This move ensures only authorised entities can use these UPI IDs, significantly reducing risks of fund misdirection.

SEBI Check Tool

To supplement the system, SEBI is also launching ‘SEBI Check’, a verification tool allowing investors to:

• Scan a QR code or enter UPI ID manually to confirm its legitimacy.
• Verify bank details, including account number and IFSC, of registered entities.

Investor and Intermediary Compliance

• Mandatory for Intermediaries: All SEBI-registered intermediaries must adopt the new verified UPI handles and educate investors about them.
• Optional for Investors: While the structured UPI handle is optional, investors must use only the new IDs if opting to pay via UPI.
• Discontinuation of Old IDs: Existing UPI IDs will be discontinued after October 1, 2025, except for ongoing SIPs (Systematic Investment Plans). New and renewed SIPs must use the verified UPI IDs.

Benefits

• Prevents Fraud: Eliminates payments to unauthorised or impersonating entities.
• Enhances Transparency: Clearly distinguishes registered entities from fraudulent ones.
• Boosts Investor Confidence: Assures secure transactions through verified payment channels.
• Supports Cybersecurity: Clamps down on fake UPI handles used for digital scams.

SEBI’s verified UPI ID initiative and the upcoming ‘SEBI Check’ tool are significant steps toward ensuring secure, transparent, and trustworthy digital transactions in India’s securities market. It reflects the regulator’s proactive stance in protecting investor interests in an increasingly digitised financial environment.