SEBI's new virtual payment mode for investors? Payright and sit tight!

Market regulator Securities and Exchange Board of India (SEBI) is coming up with a specific virtual payment mode that will be dedicated to the use of payment to only to entities regulated by it. The regulator is learned to have codenamed it as Payright.

According to sources aware of the development, “The new mode has been finalised after extensive discussions with banks and NPCI. The idea is to give investors a safer option for payment to SEBI-registered entities. This will be a UPI payment mode and will be exclusively for SEBI-registered entities like brokers, research analysts, investment advisors, mutual funds, etc."

With this new mode of payment, funds will only go to SEBI-registered entities.

For instance, if a client has to pay to broker ABC Securities, they may be given a Payright ID such as 'ABCSecurities@Payright'. This mode can be later used for SIPs and other fee payments, investments, etc.

There have been multiple instances in the past where unregistered advisors cheated investors in the name of schemes and fees, claiming to be registered with SEBI. With this mode, investors will know surely that the money will go to a SEBI-registered genuine entity because the Payright mode will not be available to any other entity or individual not registered with the regulator.

This will make it easier for UPI-savvy investors to transfer funds safely to intended and regulated entities.

When can you expect SEBI to roll out Payright?

The regulator is learned to be planning to introduce this mode by the end of December or January.

This mode may be launched on an optional basis initially and then be made compulsory for all payments to intermediaries.

Recently SEBI introduced a centralised mechanism to enable investment advisors and research analysts to collect payments through an exchange platform. 

Stock exchange BSE has already created an arm, BSE Administration and Supervisory Limited (BASL), for this purpose.

According to sources, a large number of banks have been consulted for PayRight and when implemented it will be widely available for investors and intermediaries. 

Zee Business wrote to SEBI seeking comments but no response was received.