SEBI Introduces New UPI System to Ensure Safer and More Transparent Investor Payments

In a major step toward enhancing digital payment security in India’s financial markets, the Securities and Exchange Board of India (SEBI) has rolled out a new Unified Payments Interface (UPI) framework effective October 1, 2025. The initiative aims to protect investors from fraud and make payment transactions more secure, transparent, and reliable.

What’s New in SEBI’s UPI Framework

Under the new system, only UPI handles ending with “@valid” will be considered authentic. These special handles will be exclusively assigned to SEBI-registered intermediaries such as stockbrokers and mutual fund houses.

To make identification easier, category-specific tags will be attached to these handles:

• “.brk” for brokers

• “.mf” for mutual funds

For example, a broker’s UPI ID may look like abc.brk@validhdfc, while a mutual fund’s handle could be xyz.mf@validicici. This categorization will help investors instantly verify whether they are dealing with a legitimate financial institution.

Security Features to Prevent Fraud

One of the standout features of this system is a unique green triangle symbol with a thumbs-up icon, which will appear during transactions. If this mark is missing, it serves as a warning that the payment request may not be genuine or authorized.

Additionally, SEBI has introduced a digital verification tool called “SEBI Check”. This tool allows investors to independently verify the bank account number or UPI ID of intermediaries before making a payment. It will be available through SEBI’s official website and the SEBI Saathi mobile app, adding another protective layer against fraud.

Collaboration with NPCI

The system has been jointly developed with the National Payments Corporation of India (NPCI), the body responsible for managing UPI transactions nationwide. By linking payment security with regulatory oversight, SEBI and NPCI aim to bring greater trust and confidence to financial transactions carried out in India’s capital markets.

Transition Timeline for Investors and Institutions

Currently, SEBI expects nearly 8,000 to 9,000 registered market participants—including brokers, mutual fund houses, and other intermediaries—to adopt this new system over the next few months. By December 2025, only the @valid UPI handles will be accepted for transactions.

This transition period gives financial institutions enough time to migrate, while also familiarizing investors with the new framework.

Why This Matters for Investors

The financial sector has witnessed a surge in digital payments in recent years, but with that rise has also come an increase in fraud cases, phishing attempts, and unauthorized fund transfers. By introducing this system, SEBI is seeking to:

• Reduce fraudulent transactions by ensuring payments go only to verified intermediaries.

• Improve transparency through easy-to-recognize UPI handles and category tags.

• Boost investor confidence in digital payments for stock market and mutual fund investments.

• Offer flexibility by supporting existing payment options such as NEFT, RTGS, and IMPS alongside UPI.

Expert Take

Market experts believe that this initiative will transform digital transactions in the securities market. By combining regulatory oversight with fintech innovation, SEBI is strengthening India’s position as a leader in secure digital finance. Investors will benefit from faster, smoother, and risk-free payment experiences when investing in stocks, mutual funds, or other regulated products.

Final Word

The introduction of @valid UPI handles and the SEBI Check tool marks a significant milestone in India’s journey toward safer financial markets. From December 2025 onward, investors will only be able to transact through these verified payment options, ensuring that their funds remain secure.

By plugging loopholes and increasing transparency, SEBI’s initiative is expected to reduce fraud, strengthen investor protection, and build greater trust in India’s rapidly expanding digital economy.