SEBI is considering the implementation of a unique Unified Payments Interface (UPI) address to facilitate the collection of funds by registered intermediaries. This move aims to ensure that investors’ payments are directed only to SEBI-registered entities, thus helping them avoid unregistered parties who lack access to the unique UPI handle.
In a consultation paper released on Friday, SEBI proposed the establishment of an upper limit of up to ₹5 lakh per day for capital market transactions conducted through UPI. The regulator highlighted the prevalence of unregistered entities engaging in unauthorized fund collection, often leading to misappropriation of funds for personal gain. By introducing the unique UPI address, SEBI seeks to proactively curb the proliferation of such entities and empower investors to identify and transact with legitimate market intermediaries in a secure, convenient, and efficient manner.
Under the proposed mechanism, the UPI address (UPI ID) would comprise a username and a handle separated by an “@” symbol. The username would be an alphanumeric ID assigned to the user, while the handle would serve as a unique identifier linked to the bank accounts of registered intermediaries. Additionally, a distinctive thumbs-up icon enclosed within a green triangle would serve as visual confirmation that payments are being made to verified market intermediaries, while its absence would alert investors to the potential risks associated with making payments to unapproved entities.
Overall, the implementation of unique UPI addresses holds the promise of enhancing transparency, security, and trust in financial transactions within the capital markets, ultimately safeguarding the interests of investors and strengthening regulatory oversight in the industry.
