In a move to bolster investor protection and streamline digital transactions in the securities market, the Securities and Exchange Board of India (SEBI) has launched a unique UPI-based payment mechanism called ‘Valid’. Announced on June 11, the new framework aims to enhance safety, transparency, and accessibility in financial transactions involving SEBI-registered market intermediaries.
Credits: Moneycontrol
What is ‘Valid’?
‘Valid’ is a Unified Payments Interface (UPI)-based system designed specifically for use by SEBI-registered entities, including brokers, mutual funds, investment advisors, research analysts, and others. The structured UPI address—issued only by banks in coordination with the National Payments Corporation of India (NPCI)—allows investors to identify legitimate intermediaries easily and make payments securely.
Each registered entity will be issued a unique UPI handle ending with @valid[bankname]. For instance, a broker registered with HDFC Bank might use a handle like abc.brk@validhdfc, while a mutual fund could use abc.mf@validhdfc.
To further verify legitimacy, all Valid UPI handles will display a green thumbs-up icon in a triangle, offering visual assurance that the payment is being made to a trusted, SEBI-approved entity.
Go-Live Date and Mandate
The Valid system will be rolled out starting October 1, 2025. According to SEBI Chairman Tuhin Kanta Pandey, this mechanism is a “game changer” that will significantly improve the safety and accessibility of financial transactions in capital markets.
While investors are not mandated to use this payment system, market intermediaries are required to obtain a Valid UPI ID and make it available to clients. SEBI also encourages intermediaries to actively promote adoption of the system among investors to foster wider trust and usage.
Why It Matters: Curbing Financial Fraud
SEBI’s move comes after years of concern over unauthorized money collection by unregistered entities who often defraud unsuspecting investors. These entities typically masquerade as legitimate intermediaries, collecting funds under false pretenses and siphoning off money for personal use.
‘Valid’ addresses this critical pain point by offering a verified, bank-issued payment address that guarantees the recipient is a SEBI-registered intermediary. This reduces the risk of fraud, ensures faster payment processing, and gives investors peace of mind.
Payment Limits and Transaction Security
To further enhance security, SEBI has capped UPI transactions for capital markets at Rs 5 lakh per day, a threshold that may be adjusted in consultation with NPCI. This limit balances investor convenience with risk management.
Supporting Tools: ‘SEBI Check’ and CeFCoM
Alongside Valid, SEBI also announced the upcoming launch of ‘SEBI Check’, a digital verification tool for investors. This feature will allow users to:
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Verify UPI handles by scanning a QR code or manually entering the UPI ID.
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Confirm the bank details (account number and IFSC code) of registered entities.
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Ensure the entity is legitimately SEBI-registered before making any payment.
In parallel, SEBI has rolled out CeFCoM (Centralized Fee Collection Mechanism) for investment advisors and research analysts. CeFCoM is a secure payment gateway that supports various modes—Net Banking, UPI, Cards, IMPS, eNACH, and more—to process fee payments within a closed, tamper-proof ecosystem.
A Forward-Looking Step for Digital India
Since the introduction of UPI as a payment option in capital markets in 2019, its usage has grown exponentially. The launch of Valid builds on that momentum and signals SEBI’s commitment to not just keeping pace with India’s digital revolution, but also ensuring that investor safety and regulatory oversight evolve in tandem.
Credits: Moneycontrol
Conclusion:
The launch of the “Valid” UPI-based payment method by SEBI is a significant step in bolstering investor protection and boosting confidence in the Indian securities market. In addition to preventing fraudulent activities, Valid streamlines the payment process for investors by guaranteeing that money is only sent to verified, SEBI-registered intermediaries. When combined with resources like “SEBI Check” and the CeFCoM system, the program gives capital market participants access to a safer, more transparent, and technologically advanced ecosystem. This action establishes SEBI as a progressive regulator dedicated to protecting investor interests while promoting digital adoption in finance, as India remains at the forefront of fintech innovation.
