Description

SEBI mandates registered intermediaries to obtain structured UPI addresses for investor fund collection to enhance payment security and verification.

Summary

SEBI has introduced a mandatory structured UPI address mechanism for all registered intermediaries to collect payments from investors. The system uses standardized UPI IDs with unique handles like ‘@valid’ combined with bank names to ensure investors can verify they are paying verified market intermediaries. While usage by investors remains optional, intermediaries must obtain and provide these structured UPI addresses.

Key Points

  • Mandatory for all SEBI-registered investor-facing intermediaries to obtain structured UPI addresses
  • UPI addresses will use format: [username].[segment_abbreviation]@valid[bankname]
  • Username must be generated using SEBI’s dedicated utility tool
  • Handle uses unique ‘@valid’ identifier combined with Self-Certified Syndicate Bank names
  • Payments will show ’thumbs-up inside green triangle’ icon for verification
  • Intermediaries must actively promote adoption among investors
  • Developed in consultation with NPCI and SCSBs

Regulatory Changes

  • Introduction of structured UPI payment framework for market intermediaries
  • Mandatory adoption of standardized UPI address format
  • New verification mechanism through dedicated handles and visual indicators
  • Enhanced payment security through validated bank account linkage

Compliance Requirements

  • All registered intermediaries must obtain structured UPI addresses
  • Must make UPI addresses available to investors
  • Must use SEBI’s utility for username generation
  • Must use approved segment abbreviations (detailed in Annexure B)
  • Must actively promote mechanism adoption among investors
  • Market Infrastructure Institutions, RTAs, and SCSBs must facilitate implementation

Important Dates

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

Impact Assessment

  • Affects all SEBI-registered intermediaries including brokers, mutual funds, and other investor-facing entities
  • Enhances investor confidence through payment verification system
  • Requires system changes and investor education by intermediaries
  • Streamlines payment collection while maintaining security
  • May require coordination with banks and payment service providers

Impact Justification

Mandatory requirement affecting all SEBI registered intermediaries with new payment collection framework