SEBI LAUNCHES “VALIDATED UPI” FRAMEWORK AND VERIFICATION TOOL TO CURB MARKET FRAUDS

With digital payments becoming a primary mode of investor contribution, SEBI has introduced a new mechanism which seeks to eliminate impersonation and misrouting risks. On 11th June 2025, SEBI vide a press release bearing reference number PR No: 31/2025 announced a new framework to enhance investor protection and tackle the growing issue of unauthorised fund collection in the securities market thorough unified payment interfaces (UPIs).

Effective from 1st October 2025, SEBI has announced the introduction of two new tools:

a. “Validated UPI Handles”; and

b. “SEBI Check”,

to ensure secure and transparent UPI transactions by investors/ clients of SEBI-registered intermediaries.

Validated UPI Handles: This initiative seeks to address the increasing instances of fraud by unregistered entities posing as legitimate intermediaries to ensure that investors can confidently make payments to authorised market participants.

@valid: All SEBI-registered intermediaries collecting investor funds must adopt a structured UPI address format. The address is to include a readable username followed by a suffix that indicates the category of the intermediary (such as .brk for brokers or .mf for mutual funds) and end with the exclusive “@valid” handle issued by the National Payments Corporation of India (NPCI).

New validation symbol: Transactions made to these validated addresses will feature a “thumbs-up inside a green triangle” icon as a visual indicator of legitimacy. Intermediaries are also required to use QR codes displaying this icon to simplify verification processes for investors.

Compliance: SEBI-registered intermediaries should begin updating their UPI infrastructure and educate investors on identifying verified payment handles.

SEBI Check: This tool seeks to allow users to verify the authenticity of a UPI ID either by scanning the QR code or manually entering the ID. Additionally, investors will also be able to confirm the bank account number and IFSC code associated with the registered intermediary, ensuring transparency and accuracy.

This measure represents SEBI’s growing reliance on fintech tools to ensure market integrity and investor confidence.

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