The Securities and Exchange Board of India (SEBI), through Circular SEBI/HO/DEPA-II/DEPA-II_SRG/P/CIR/2025/86 dated June 11, 2025, has introduced a framework requiring all SEBI-registered investor-facing intermediaries to adopt standardised, validated, and exclusive Unified Payment Interface (UPI) IDs for payment collection from investors. This measure aims to enhance security, transparency, and investor trust in securities market transactions.
Objective
The initiative seeks to streamline investor payments by mandating intermediaries (brokers, mutual funds, depository participants, RTAs, investment advisers, etc.) to collect funds only through structured and verified UPI IDs. This ensures that investors’ funds are directed to authenticated bank accounts linked to SEBI-registered entities. The move follows public consultations and inputs from the National Payments Corporation of India (NPCI) and Self-Certified Syndicate Banks (SCSBs).
Structure of UPI IDs
A UPI address consists of a username and a handle (e.g., abc.brk@validhdfc).
- Username: Alphanumeric, chosen by intermediaries with a suffix denoting their type (e.g., “.brk” for brokers, “.mf” for mutual funds, “.dp” for depository participants).
- Handle: Standardised as @valid, followed by the bank’s name (allocated by NPCI).
- Security Feature: Transactions to verified intermediaries will display a white thumbs-up icon inside a green triangle, assuring investors of authenticity. Its absence will serve as a warning.
Allocation and Exclusivity
- UPI IDs with “@valid” handles are reserved exclusively for SEBI-registered intermediaries (merchant code 6211).
- Only banks listed as SCSBs can issue these handles (52 banks, including SBI, HDFC, ICICI, Axis, Kotak, etc.).
- Existing bank accounts of intermediaries can be linked to new UPI IDs; no new accounts are required.
Transaction Limits
The NPCI-set transaction limit for UPI in capital markets remains up to ₹5 lakhs per day, subject to periodic review.
SEBI Check Functionality
A new tool, “SEBI Check”, will allow investors to verify intermediary UPI IDs and corresponding bank details (account number and IFSC). This will be accessible via QR code scanning or manual entry, further reducing fraud risks.
Responsibilities of Stakeholders
- Intermediaries:
- Obtain validated UPI IDs via SI Portal.
- Use new UPI IDs for all new/renewed transactions (while old IDs remain temporarily valid).
- Generate QR codes with the thumbs-up logo.
- Conduct investor awareness campaigns (SMS, emails, social media, FAQs).
- SCSBs: Verify and issue UPI IDs through NPCI, ensuring due diligence.
- MIIs & RTAs: Enable system changes, facilitate SEBI Check integration, and run awareness programs.
Implementation Timeline
Key activities follow a structured rollout schedule:
- Banks to obtain login credentials (T+30 days).
- MIIs and banks to update systems (T+60 to T+75 days).
- Allocation of UPI IDs (T+90 days).
- Mandatory adoption by intermediaries (T+105 days).
- Discontinuation of old UPI IDs by October 1, 2025 (T+180 days).
Investor Choice
While intermediaries must adopt the new system, investors retain the choice of payment mode (UPI, NEFT, RTGS, IMPS, cheque). However, if UPI is used, only the validated IDs must be used.
Conclusion
SEBI’s framework for standardised and validated UPI IDs strengthens payment security in the securities market, combats fraud, and improves investor confidence. By mandating unique UPI handles, integrating verification tools, and enforcing strict awareness measures, the circular ensures payments are routed exclusively to registered, verified intermediaries, thereby safeguarding investor funds. Effective October 1, 2025, this marks a significant step towards digitisation and risk-free financial transactions in the capital markets.
