SEBI has launched a landmark initiative to enhance investor protection and combat cyber fraud in securities. As part of this, they will establish a robust payment method utilizing 'Verified UPI IDs for Intermediaries.' This new system will also include a corresponding 'Sebi Check' application.
The comprehensive scheme, as announced by SEBI Chairman Tuhin Kanta Pandey, will be launched on October 1, 2025, with the intent to give investors a secure and transparent vehicle to transact funds.
The nucleus of the system is the requirement for all SEBI-registered intermediaries, comprising stockbrokers, mutual fund houses, and portfolio managers, to abide by a standardized and validated UPI address pattern for their payment mechanism.
These new UPI IDs will carry a distinct '@valid' suffix, thereby ensuring that investors do not unwittingly transfer funds to some dubious entity. To elucidate, a broker called ABC Ltd. with an account at XYZ bank will have his valid UPI ID as something like 'abc.brk@validXYZ.'
This shall stand as a great disincentive for fraudulent entities that so often come up or clone an original intermediary to siphon investors out of their funds.
For heightened security and ease of verification, SEBI will provide a clear visual indicator. This indicator, a 'thumbs-up inside a green triangle,' will be displayed during payment confirmation when an investor makes a payment to a validated UPI handle.
It will be an instant assurance displayed on the screen that the payment is being made to a verified and registered entity. Intermediaries will also be directed to display QR codes featuring this unique icon in a prominent fashion, thereby making payments easier and more assuring for investors.
Taking validated UPI handles a few steps further, SEBI is introducing an important new feature called 'Sebi Check.' This is a revolutionary tool enabling investors to independently verify the validity of any UPI ID before paying it. He can scan a QR code or enter a UPI ID manually.
Upon successful verification, the tool will show critical bank details of the registered intermediary, such as account number and IFSC code, allowing an investor to cross-verify them and avoid fallacious transactions.
SEBI Chairman Tuhin Kanta Pandey said that the initiative has become necessary in addressing cyber frauds in the securities market, where fraudsters increasingly mislead investors by perpetrating various schemes through deceptive apps and platforms. He pointed out that these investors incur heavy financial losses at the hands of unscrupulous elements.
The regulator would also seek to work with the online app marketplaces to ensure that only validated applications of market intermediaries are available for download and will conduct investor protection campaigns on cybersecurity and fraud prevention over the next two years.
While fund transfer modes available for SIPs already going on will be maintained for now to ensure a smooth transition, new SIPs and renewals/extensions of existing SIPs will have to make use of these new, verified UPI IDs. This reform is a major milestone toward stronger digital payment infrastructure for India's capital markets that is capable of keeping fraud away and instilling greater faith and confidence in the investors.