Description

SEBI mandates structured UPI address mechanism for registered intermediaries to collect funds from investors with enhanced safety and validation.

Summary

SEBI has introduced a mandatory structured UPI address mechanism for all registered intermediaries to collect funds from investors. The framework uses standardised UPI IDs with specific username formats and ‘@valid’ handles combined with bank names to ensure validated and secure payments. While usage remains optional for investors, intermediaries must obtain and provide these structured UPI addresses.

Key Points

  • Mandatory for all SEBI-registered investor-facing intermediaries to obtain structured UPI IDs
  • UPI addresses follow format: username.segment@validbankname (e.g., abc.brk@validhdfc)
  • Username must include intermediary segment abbreviation (brk for broker, mf for mutual fund)
  • Special green triangle with thumbs-up icon will identify validated intermediary payments
  • Framework developed in consultation with NPCI and Self-Certified Syndicate Banks
  • Intermediaries encouraged to actively promote adoption among investors

Regulatory Changes

  • Introduction of structured UPI address framework for payment collection
  • Mandatory compliance for Market Infrastructure Institutions, Investor Facing Intermediaries, RTAs and SCSBs
  • Specific username generation utility to be used for creating UPI IDs
  • Unique ‘@valid’ handle system implemented with bank integration

Compliance Requirements

  • All registered intermediaries must obtain structured UPI addresses
  • Must make these UPI addresses available to investors
  • Username generation must use SEBI’s designated utility tool
  • Must use specified segment abbreviations in username format
  • Intermediaries must actively promote mechanism adoption
  • UPI handles allocated through NPCI coordination

Important Dates

  • Circular issued: June 11, 2025
  • Implementation timeline and deadlines to be specified in subsequent communications

Impact Assessment

High impact on payment infrastructure across securities market. All intermediaries must restructure payment collection systems. Enhanced investor safety through validated payment channels. Operational changes required for banks, intermediaries, and technology systems. Potential for improved investor confidence through verified payment mechanism.

Impact Justification

Mandatory implementation affecting all SEBI registered intermediaries and their payment collection processes