Securities and Exchange Board of India (SEBI) has released a consultation paper on a draft circular aimed at ensuring safe and efficient UPI transfers in the securities market. SEBI first introduced UPI as a payment mode in 2019, leading to its adoption in various financial processes. However, unregistered entities have misused UPI for unauthorized fund collection, often diverting money for personal gains. To address this issue, SEBI proposes a unique UPI address exclusively for registered market intermediaries, enabling investors to verify and direct payments only to authorized entities. This measure is expected to curb fraud, improve transparency, and safeguard investor interests. The draft circular is based on discussions with SEBI’s Market Data Advisory Committee (MDAC), Intermediary Advisory Committee (IAC), and the National Payments Corporation of India (NPCI). SEBI invites public comments from investors, market participants, and other stakeholders to refine the proposal. Interested parties can submit feedback through SEBI’s online portal by February 21, 2025.
Securities and Exchange Board of India
Consultation Paper on Draft Circular for Safe and Efficient Transfers on UPI
Jan 31, 2025| Reports : Reports for Public Comments
1. Background
1.1 SEBI introduced usage of Unified Payments Interface (UPI) as a mode of payment in the securities market for the first time in 2019. The successful experience and efficiency brought by UPI resulted in its inclusion in various other processes as well. However, over the years, many unregistered entities have misled investors by unauthorized collection of money, which is mostly siphoned-off for their personal There is a need to proactively restrict their proliferation and thereby enable investors to identify SEBI registered market intermediaries and make requisite payments to them in a more legitimate, convenient, and efficient way.
2. Objective
2.1 It is envisaged to create a unique Unified Payments Interface (‘UPI’) address for collection of money by SEBI investor facing registered market participants/ intermediaries (‘Registered Intermediaries’). This unique UPI address will help investors ensure that their payments are reaching only to SEBI registered intermediaries. As a corollary, this would also help investors identify, isolate and avoid unregistered entities, who will not have access to this unique UPI
2.2 The consultation on draft circular is being sought pursuant to a series of discussions in the Market Data Advisory Committee (‘MDAC’) and Intermediary Advisory Committee (‘IAC’) of SEBI, and other stakeholders, including National Payments Corporation of India (‘NPCI’), with a view to conceptualize structured UPI address being proposed in the ensuing
3. Public Comments:
1.1. Draft Circular on “Safe and Efficient Transfers on UPI” is placed at Annexure I. Public comments are invited on the Draft Circular and suggestions along with supporting rationale from all interested stakeholders including individual investors, market participants and intermediaries, investor’s associations etc. on the proposals as at Para 7.1 in the following format:
| Name of entity/ Person/ organization: | |||
| Contact Details: | |||
| Category: (whether market intermediary/ participant or public (investor, academician etc.) | |||
| S. No. | Proposal | Suggestions | Rationale |
3.1 The comments/ suggestions should be submitted latest by February 21, 2025, through the following link:
https://www.sebi.gov.in/sebiweb/publiccommentv2/PublicCommentAction.do?d oPublicComments=yes
3.2 In case of any technical issue in submitting your comment through web based public comments form, you may write to depaconsultation@sebi.gov.in with the subject:
“Public comments on Draft Circular – Safe and Efficient Transfers on UPI”
