SEBI UPI Rules for Investors | Secure Your Investments with Verified IDs
In a decisive move to protect retail investors from the growing menace of financial fraud, the Securities and Exchange Board of India (SEBI) is set to roll out a new, enhanced security framework for Unified Payments Interface (UPI) transactions. Starting October 1, 2025, all SEBI-registered intermediaries, including stockbrokers and mutual fund houses, will be required to use a special, verified UPI ID for collecting funds from investors. This initiative is designed to create a secure and easily identifiable payment channel, making it significantly harder for fraudulent entities and unregistered “finfluencers” to dupe unsuspecting investors. In an era where digital platforms have democratized market access, this measure is a critical step towards ensuring that the ecosystem remains safe and trustworthy for the millions of new investors entering the market.
The core of this new mechanism is the introduction of a structured UPI handle that will be exclusively available to SEBI-registered entities. This special UPI ID will feature the unique suffix “@valid,” which will be assigned by the National Payments Corporation of India (NPCI) only after verifying the intermediary’s registration status with SEBI. When an investor makes a payment to a broker or an Asset Management Company (AMC), they will clearly see this validated handle, providing an immediate visual confirmation that they are dealing with a legitimate, regulated entity. This simple yet powerful feature acts as a first line of defense against scams where fraudsters create look-alike UPI IDs to trick investors into transferring money. Check Bank IFS Codes of all banks.
This move comes in response to a surge in complaints regarding unregistered financial advisors and illicit schemes promising guaranteed high returns. These entities often operate through social media and messaging apps, luring investors with false promises and then collecting funds through regular UPI handles that are untraceable and unregulated. By making the “@valid” handle mandatory for all registered intermediaries, SEBI is effectively drawing a clear line in the sand. Any entity collecting funds for securities market investments without this verified handle will be immediately identifiable as potentially fraudulent. SEBI is also developing a tool named ‘SEBI Check’ to help investors verify the authenticity of UPI IDs and bank details of registered intermediaries before making any payments.
For investors, while the use of this new UPI handle will be optional, if they choose to pay via UPI, they must use the new verified ID system. All other payment methods like NEFT, RTGS, IMPS, and cheques will continue to be available. However, the intermediaries themselves will be barred from accepting payments through their old, non-verified UPI IDs after the October 1 deadline. This ensures a clean and complete transition to the new, more secure system. To avoid disruption for existing investors, ongoing Systematic Investment Plans (SIPs) will continue with their current mandates. However, any new SIPs or renewals will have to be set up using the new verified UPI IDs. This phased approach ensures a smooth transition without causing inconvenience to long-term investors.
This initiative is part of SEBI’s broader push to leverage technology for enhanced investor protection. By creating a closed ecosystem for financial transactions, the regulator is making it significantly more difficult for bad actors to operate. The move also aligns with the broader trend of embedding security features directly into the payment infrastructure, rather than relying solely on investor education and awareness. While investors should always remain vigilant, this structural change provides a powerful safety net, reducing the cognitive load on individuals to constantly verify the legitimacy of every entity they transact with.
The introduction of verified UPI IDs is a landmark step in safeguarding the interests of retail investors in India. It empowers investors by giving them a simple and reliable tool to identify legitimate market intermediaries, thereby reducing their vulnerability to fraud. As the Indian stock market continues to attract a record number of new participants, initiatives like this are crucial for maintaining market integrity and fostering investor confidence. It sends a strong message that while SEBI welcomes wider participation, it will not compromise on the security and protection of the investing public. Come October 1, the “@valid” handle will become a symbol of trust and security in the Indian capital markets, heralding a safer investment journey for all.