The Securities Exchange Board of India (Sebi) has unveiled a new tool to verify the authenticity of Unique Payment Interface (UPI) addresses, named ‘Valid’, for market intermediaries collecting funds from investors, Tuhin Kanta Pandey, chairman, Sebi, said on Monday.

“We are introducing a system within the UPI system to check whether or not a UPI address is genuine, like that of a bank, broker, etc. This would be very handy. It will be implemented from 1st October,” Pandey told reporters in Mumbai. The tool will empower investors to check the veracity of UPI IDs by either scanning the QR Code of the UPI ID or manually entering the ID. It will then retrieve the relevant details such as account number and IFSC code.

The capital markets regulator envisions that this tool will enable curbing instances of investors falling victim to cybercrime. “There is a lot of public concern regarding cyber fraud. We have to find systemic solutions to it. We have 130 million unique investors now, and we need a system in the securities market where they invest through a system where they know they are investing at the right place,” Pandey said.

Additionally, Sebi is also introducing ‘Valid’ for market intermediaries, a unique UPI-based payment ID issued by banks only to Sebi-registered entities. Market intermediaries can use Valid to collect funds from clients, including payments to brokers, research analysts, investment advisors, and mutual funds. ‘Valid’ was unveiled after inputs from stakeholders—including the National Payments Corporation of India (NPCI), banks, and market regulators—who were consulted by Sebi, and assessment of the readiness of the ilk.

The Sebi-registered entities will have the word ‘@valid’ attached to the name of the bank in the UPI ID, so that the investors are able to identify the authenticity of the ID of the entity. A green thumbs-up icon in a triangle will also be shown to indicate the veracity of the transaction. The capital markets regulator has also fixed an upper limit of ₹5 lakhs every day for capital market transactions using UPI, with the option of reviewing it after consultation with the NPCI.

Sebi had allowed UPI as a means of payment for transactions in 2019. However, there have been concerns that unregistered entities, conning and misleading investors to collect money in an unauthorised manner. Hence, the need for a system that sieves unregistered, fraudulent entities from genuine, Sebi-registered intermediaries was identified to enable convenient and legitimate payments.