SEBI's New UPI Shield: Pay Your Broker Safely From October 1, 2025

Starting October 1, 2025, the way you pay your broker or mutual fund is about to get a major security upgrade. The Securities and Exchange Board of India (SEBI) is rolling out a new, structured UPI payment mechanism designed to protect investors from the growing menace of online fraud and impersonation.

This move tackles a critical vulnerability: fraudsters creating fake UPI IDs that mimic legitimate financial entities to trick investors into sending them money. SEBI’s new framework ensures that every rupee you invest goes exactly where it’s supposed to.

Here’s what you need to know about this game-changing initiative.

Key Takeaways

• Mandatory for Intermediaries: From October 1, 2025, all SEBI-registered intermediaries (brokers, mutual funds, etc.) must offer a new, standardized, and validated UPI ID for collecting funds.
• Fraud Prevention: The system is designed to eliminate fake UPI handles, ensuring you only pay verified entities.
• Real-Time Verification: A new “SEBI Check” feature will allow you to verify the intermediary’s details before you approve the payment.
• Clear Identification: Verified payments will display a distinct “thumbs-up inside a green triangle” icon, giving you a clear signal of authenticity.

The Problem: Rise of UPI-Based Fraud

In recent years, many investors have fallen victim to scams where they were tricked into transferring funds to UPI IDs of unregistered entities impersonating real brokers or investment advisors. These fraudulent IDs often look deceptively similar to official ones, making it easy for investors to be misled. SEBI’s new rules are a direct response to this rising threat.

How the New UPI Mechanism Works

SEBI’s circular, issued on June 11, 2025, outlines a multi-layered solution to secure the payment process.

1. Standardized and Validated UPI IDs

The core of the new system is a unique UPI address structure. While using it is optional for investors, it’s compulsory for all intermediaries to get one. The new UPI IDs will have a specific format:

• Username: An alphanumeric name chosen by the intermediary.
• Category Suffix: An abbreviation defining the type of intermediary (e.g., .brk for a broker, .mf for a mutual fund).
• Handle: The handle will be @valid followed by the bank’s name (e.g., @validhdfc).

For example, a broker named “ABC Securities” using HDFC Bank might have a UPI ID like abcsecurities.brk@validhdfc.

This structure, allocated exclusively by the National Payments Corporation of India (NPCI), ensures that only SEBI-registered entities can have such a “valid” handle.

2. The “SEBI Check” Verification Tool

To add another layer of security, SEBI is developing a “SEBI Check” functionality. Here’s how it will empower you:

1. Scan or Enter: When you initiate a payment by scanning a QR code or entering the UPI ID, the verification tool will be triggered.
2. Authenticate: Your UPI app will display the intermediary’s registered name, bank account number, and IFSC code for you to see.
3. Confirm with Confidence: You can cross-check these details. More importantly, a thumbs-up icon within a green triangle will appear, visually confirming that the UPI ID is authentic and belongs to a SEBI-registered entity. The absence of this icon is a clear warning sign.

This real-time check removes all guesswork and drastically reduces the risk of sending money to an imposter.

Who Does This Apply To?

This new rule applies to all SEBI-registered intermediaries that collect funds from investors, including:

• Stock Brokers
• Mutual Funds (for new and renewed SIPs)
• Portfolio Managers (PMS)
• Alternative Investment Funds (AIFs)
• Registrar and Share Transfer Agents (RTAs)

While existing payment methods like NEFT, RTGS, and net banking will continue, this new UPI channel offers a highly secure and convenient option. Importantly, existing mutual fund SIPs will not be affected, but all new or renewed SIPs after the deadline must use the new UPI IDs.

What Investors Need to Do

As an investor, your role is simple but crucial for your own safety.

1. Look for the Verified Icon: Starting October 1, 2025, always look for the green “thumbs-up” verification symbol and check the intermediary’s name before authorizing any UPI payment.
2. Use Official QR Codes: Only scan QR codes from your intermediary’s official website or registered mobile app. Avoid codes sent via WhatsApp, Telegram, or other unofficial channels.
3. Report Suspicious IDs: If you encounter a UPI ID that claims to be from your broker but doesn’t get the “SEBI Check” verification, do not proceed with the payment. Deny the transaction and immediately report the suspicious ID to SEBI through the SCORES portal.

A Safer Future for Indian Investors

SEBI’s new UPI mechanism is a landmark step in enhancing investor protection in the digital age. By creating a closed, verified ecosystem for payments, the regulator is building a formidable shield against fraud. This move will not only secure your hard-earned money but also boost overall confidence in India’s capital markets.

Stay alert, stay informed, and get ready to embrace a safer way to invest.

This article is only for information purposes and is not investment advice. Before investing, do your own research.