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Introduction
In a significant move to bolster investor protection,
the Securities and Exchange Board of India (SEBI) on 1 October 2025 officially launched “Validated UPI Handles”
and the “SEBI Check”
verification tool. Under this framework, all SEBI-registered, investor-facing
intermediaries must adopt standardized UPI IDs (ending with “@valid”) to
receive payments. Through SEBI
Check, investors can instantly validate UPI IDs, bank accounts
and IFSCs before transferring funds — aiming to plug holes used by fraudsters.
This initiative signals a strengthened push toward safer payments in the
securities markets.
Background / Context
Why This Matters
In recent years, India has seen a sharp
increase in digital payment use, especially through UPI (Unified Payments
Interface). UPI has become a mainstream mode for everything from bill payments
to small retail transactions. Yet
with rising volumes, fraudulent schemes have followed — from phishing to
impersonator brokers who lure investors into transferring funds to fake accounts.
In capital markets, intermediaries (brokers, mutual funds, portfolio managers,
etc.) often collect payments from investors — for IPOs, mutual fund
subscriptions, additional share purchases, etc. These payments are sometimes
routed via UPI. Until now, there was no standard requirement that these
intermediaries use verified or distinct UPI IDs. Fraudsters have exploited this
ambiguity by creating look-alike UPI addresses or QR codes, impersonating
intermediaries, or using unauthorised accounts to siphon funds.
SEBI has for some time been under pressure to
tighten investor protection in the digital age. The Verified UPI / SEBI Check
scheme continues a broader regulatory trajectory: increasing digital trust,
tightening KYC and anti-fraud norms, and enhancing transparency among
intermediaries. The launch also reflects collaboration between SEBI and NPCI
(National Payments Corporation of India).
Historical Steps Toward Payment Safety
·
SEBI has, over previous years, introduced
guidelines for “third-party collection accounts” and client fund segregation to
prevent misuse of investor money.
·
The use of UPI in securities markets was allowed
earlier (including for IPO payments) but under general UPI rules without
intermediary-level validation.
·
Drafts and consultations earlier in 2025 had
already floated a “safe and efficient transfer on UPI” regime for securities
transactions (e.g. Jan 2025 drafts).
·
Stakeholder consultations included brokers, depositories,
AMCs, NPCI, and investor associations to ensure feasibility.
Given this background, the rollout of
validated UPI handles and a real-time verification tool is a natural evolution
in regulation.
Detailed Explanation of the News
What SEBI Has Mandated
1.
Validated
UPI Handles (“@valid”)
o Every
SEBI-registered, investor-facing intermediary must adopt a unique UPI ID in a
prescribed format — username.category@valid<bank>
(for example: abc.brk@validhdfc
for a broker).
o Category
suffixes help distinguish types: .brk for brokers, .mf for mutual
funds, etc.
o The
UPI handle will carry a visual
verification icon — a “thumbs-up inside a green triangle.” When
an investor initiates payment via UPI, this icon should appear to confirm
authenticity. Its absence is a warning.
o A
specially designed QR
code carrying the same verification icon will accompany the
validated handle to ensure error-free scanning.
o These
handles are additional,
not compulsory replacements for other modes. Investors may still pay via NEFT,
RTGS, IMPS, etc.
2.
SEBI
Check Verification Tool
o A
web/mobile tool (integrated via SEBI’s portal / Saarthi app) enabling investors
to confirm in real time
whether a UPI ID or bank account with IFSC belongs to a SEBI-registered
intermediary.
o The
investor can input either a UPI address or (account number + IFSC) to verify
legitimacy.
o Even
if an entity offers non-UPI payment modes, SEBI Check allows verification
across UPI, NEFT, RTGS, IMPS.
o The
system is designed to reject or flag unregistered or suspicious handles
(without the valid icon), prompting investors to avoid payment.
Transitional Timelines & Enforcement
·
SEBI’s press release (PR No. 64/2025) formally
marked the rollout date as 1
October 2025.
·
Intermediaries have a grace period until 8 December 2025 to
transition. After that, legacy UPI IDs without the validated format may be
gradually disallowed.
·
Major intermediaries (covering over 90% investor
base) and mutual funds have already adopted the @valid handles.
·
SEBI retains authority to enforce compliance,
penalize defaults, and restrict non-compliant intermediaries from transacting
via UPI in the securities domain.
Key Legal / Regulatory Foundations
·
The move aligns with SEBI’s investor protection
mandate under the SEBI Act, 1992
and its powers to regulate intermediaries.
·
SEBI’s circulars and press releases (e.g. press
release 64/2025) are binding on registered intermediaries.
·
NPCI (as UPI governing body) cooperation is
essential: issuance of valid UPI handles, standardization, and infrastructure
for icon / verification support.
·
The scheme complements existing norms on client fund segregation, third-party
accounts, and KYC/AML
obligations.
“With the validated UPI handles and SEBI Check
facility, investors can instantly know whether the payment destination is
genuine — this is a crucial step in plugging fraud vectors.”
— SEBI circa press release remarks
Impact Analysis
Who Gains, Who Must Adjust
Beneficiaries
·
Retail
Investors / Small Investors: Can transact with greater
confidence, avoid misdirected payments, and reduce losses from UPI-based fraud.
·
Trustworthy
Intermediaries: Firms that already adhere to compliance will
gain reputational advantage — the green checkmark becomes a trust symbol.
·
Capital
Market Integrity: The move curbs misuse of market
infrastructure by unscrupulous actors, enhancing credibility of digital finance
in securities.
·
Regulators:
SEBI strengthens its investor protection capability and deterrence against
fraud.
Those Needing Adjustment
·
Smaller
Intermediaries / New Entrants: Entities must upgrade systems,
register, coordinate with banks/NPCI, and adopt new UPI handles within the
deadline.
·
Technology
Providers / Payment Gateway Firms: Need to embed icon logic,
verification logic, and UI changes in their systems.
·
Audit
/ Compliance Teams in Intermediaries: Must check whether UPI,
QR, payment flows conform to SEBI’s validated scheme.
Practical Implications
|
Stakeholder |
Key Change |
Practical Steps / Risks |
|
Businesses / Intermediaries |
Need to adopt validated UPI handles |
Coordinate with banks & NPCI; update systems; retire
old handles |
|
Taxpayers / Investors |
Must verify handles before paying |
Use SEBI Check, look for icon, avoid unverified UPI addresses |
|
Auditors / CAs / Compliance Officers |
Ensure client compliance |
Audit application of new UPI IDs, validate systems,
advise clients |
For Businesses / Intermediaries
·
They must register with NPCI / banks for
“@valid” UPI issuance, map category suffixes correctly.
·
Update websites, mobile apps, invoices, QR codes
to reflect new validated handles.
·
Ensure that legacy UPI IDs are phased out, and
customers are notified.
·
Train staff and customer support to guide
investors in verifying via SEBI Check.
For Taxpayers / Investors
·
Always confirm UPI ID shows the green “thumbs-up
in triangle” icon during transaction.
·
Before paying, feed UPI ID or account + IFSC
into SEBI Check to confirm legitimacy.
·
Avoid transferring funds until verification is
satisfied.
·
Retain screenshots or receipt of verification as
proof in case of disputes.
For Auditors / Compliance Professionals
·
In audit reports, verify that client firms have
adopted validated handles within deadline.
·
Check that system logs record verification
checks and usage of new handles.
·
Ensure that non-UPI payment modes (NEFT/RTGS
etc.) are still supported but accompanied by SEBI Check validation.
·
Advise clients on potential penalties or
restrictions if non-compliant.
Overall, the industry must invest in
technology, awareness, and operational transition — but the long-run payoff is
higher security and trust.
Common Misunderstandings (Bullet Points)
·
Believing @valid
handles are mandatory replacements
for all payment modes — they are optional
/ additional, not to replace NEFT, IMPS etc.
·
Assuming the presence of the “thumbs-up icon”
automatically ensures transaction success — it only signifies the target UPI ID
is validated; transaction may still fail for other reasons.
·
Thinking SEBI Check works only for UPI — it
supports verification across UPI, NEFT, RTGS, IMPS.
·
Assuming legacy UPI handles will be immediately
blocked — there is a grace period until 8 December 2025.
·
Confusing the @valid handle scheme with
general UPI branding or consumer UPI IDs (this is specific to SEBI-registered
intermediaries in securities).
Expert Commentary
As a finance and taxation professional with
two decades’ experience, I see SEBI’s move as a landmark in digital financial safeguards.
The validated UPI + SEBI Check architecture inserts a trust layer at the
payment interface — often the weakest link exploited by fraudsters.
However, the true success will depend on execution and adoption.
If smaller brokers or agents lag behind, gaps will persist. The deadline
enforcement and public awareness will be critical. In a way, this is the
digital equivalent of bank cheques acquiring watermarks — a verification norm
becomes a trust standard. Over time, the green tick will be as meaningful as a
padlock icon in browser security.
Conclusion & Action Steps
SEBI’s rollout of Validated UPI Handles and
the SEBI Check
verification tool marks a decisive regulatory upgrade in safeguarding investor
payments. By binding intermediaries to standardized, ICON-based UPI handles and
granting investors the power to verify those credentials in real-time, SEBI
aims to choke off fraud at the source.
In summary:
·
Intermediaries must adopt new UPI IDs by 8 December 2025, or risk
losing UPI access.
·
Investors should routinely validate UPI
addresses via SEBI Check before sending funds.
·
The transition will involve technological,
operational, and educational coordination across the ecosystem.
Looking ahead, we can expect:
·
Further tightening of identity, KYC, and
real-time monitoring in payment flows.
·
Possible extensions of verified payment schemes
in other financial verticals (e.g. insurance, lending).
·
Enforcement action for non-compliant
intermediaries and increased investor awareness campaigns.
·
Integration of SEBI Check with mobile broker
apps, payment wallets, and banking UPI apps for seamless verification.
Action
Steps for Stakeholders:
·
Intermediaries:
Immediately coordinate with NPCI and your sponsor bank to obtain @valid
handles; revise all payment interfaces and retire old ones.
·
Investors:
Make a habit of checking SEBI Check before transferring funds, and demand
validated UPI from brokers.
·
Advisors
/ Auditors: Incorporate compliance checks of new UPI handles in
audit and control frameworks.
If properly adopted, SEBI’s initiative should
dramatically reduce UPI-based fraud in capital markets and instill confidence
in India’s digital investment infrastructure.
FAQs
Q1:
What exactly is a “Validated UPI Handle” under SEBI’s scheme?
A1: It is a standardized UPI ID, issued by NPCI, to SEBI-registered
investor-facing intermediaries. It carries the marker “@valid” and a category
suffix (e.g. .brk,
.mf).
When used, it triggers a verification icon (thumbs-up inside a green triangle)
to indicate legitimacy.
Q2:
Must all investors use the validated UPI handle — can I still pay via NEFT/IMPS?
A2: No. The validated UPI handle is optional/additional,
not mandatory. You can still use NEFT, RTGS, or IMPS. However, SEBI encourages
using the validated channel for safer payments.
Q3:
How does SEBI Check work, and what can I verify?
A3: SEBI Check is a tool (via SEBI portal / Saarthi app) where investors can
input a UPI ID or account number + IFSC. The system responds instantly whether
it's a legitimate SEBI-registered intermediary or not. It supports verification
across UPI, NEFT, RTGS, IMPS.
Q4:
What happens if an intermediary fails to adopt the validated handle by deadline?
A4: After 8 December 2025, legacy UPI IDs without validation may be disallowed
for receiving payments in securities transactions. SEBI can take action or
restrict UPI routing to non-compliant parties.
Q5:
Is the green “thumbs-up triangle” icon foolproof proof of legitimacy?
A5: The icon is a good indicator, but not a guarantee of transaction success.
It confirms that the UPI ID is validated. Technical or banking issues may still
cause transaction failure. Use SEBI Check and confirm before sending funds.
References / Source Links
1.
SEBI Press Release: “SEBI rolls out ‘Validated UPI
Handles’ and ‘SEBI Check’ for secure investor payments”
2.
SEBI Introduces Verified UPI Handles & SEBI Check —
SCC Online blog commentary
3.
PolicyEdge analysis on SEBI Check & validated UPI
scheme
4.
Taxmann write-up on new UPI IDs & verification tool
5.
Business / press coverage of SEBI’s new mandate