Description

BSE circular mandating SEBI registered intermediaries to adopt standardised, validated and exclusive UPI IDs for collecting payments from investors to enhance transparency and reduce fraudulent transactions.

Summary

BSE has issued a circular mandating SEBI registered intermediaries to adopt standardised, validated, and exclusive UPI IDs for collecting payments from investors. This initiative aims to enhance transparency, security, and accountability in payment collection processes and reduce instances of fraudulent transactions.

Key Points

  • SEBI registered intermediaries must use standardised and validated UPI IDs for payment collection
  • UPI IDs must be exclusive to the intermediary and properly registered
  • Applies to all payment collections from investors by intermediaries
  • Part of SEBI’s efforts to strengthen digital payment infrastructure in securities markets
  • Enhances investor protection through validated payment channels
  • Reduces risk of fraudulent payment collection activities

Regulatory Changes

SEBI has mandated that all registered intermediaries operating in securities markets must transition to using standardised, validated, and exclusive UPI IDs for collecting payments from investors. This requirement ensures:

  • Proper validation and authentication of payment collection channels
  • Exclusive use of designated UPI IDs by registered intermediaries
  • Standardized format and structure for UPI IDs across the industry
  • Enhanced traceability and audit trail for investor payments

Compliance Requirements

  • All SEBI registered intermediaries must obtain and register standardised UPI IDs
  • Existing payment collection systems must be updated to use validated UPI IDs
  • UPI IDs must be exclusive to the intermediary and not shared
  • Intermediaries must ensure proper authentication and validation processes
  • Systems and processes must be updated to support the new UPI ID framework
  • Intermediaries should communicate the standardised UPI IDs to their investors

Important Dates

Implementation timeline and compliance deadlines to be followed as specified in the circular. Intermediaries should prepare for system changes and investor communication well in advance.

Impact Assessment

Market Impact: High - affects all SEBI registered intermediaries including brokers, depositories, and other market participants who collect payments from investors.

Operational Impact: Significant operational changes required in payment collection systems, requiring technology upgrades and process modifications.

Investor Impact: Positive - enhances investor protection by ensuring payments are collected through validated and authenticated channels, reducing fraud risk.

Technology Impact: Intermediaries need to upgrade their payment infrastructure to support standardised and validated UPI IDs.

Compliance Impact: Mandatory compliance requirement for all SEBI registered intermediaries with potential regulatory consequences for non-compliance.

Impact Justification

High importance and impact as this mandates significant operational changes for all SEBI registered intermediaries in their payment collection systems, affecting brokers, depositories, and other market participants. Requires system changes and standardization of UPI infrastructure.