India’s capital markets regulator, the Securities and Exchange Board of India (SEBI), on Monday introduced the Past Risk and Return Verification Agency (PaRRVA)—a new verification framework aimed at enhancing transparency and protecting investors from misleading performance claims.
SEBI Chairman Tuhin Kanta Pandey said the initiative marks a major step toward reinforcing trust in the securities market.
“We are taking an important step to strengthen the integrity and transparency of India’s securities market,” he said. “The launch of PaRRVA introduces a pioneering mechanism that allows SEBI-registered intermediaries to present verified past returns to investors.”
Highlighting its global significance, Pandey noted that while many international markets acknowledge the risks of unverified performance claims, India has taken the lead by creating an independent verification mechanism. “With PaRRVA, India is setting a new international benchmark for transparency, accountability, and investor protection,” he added.
How PaRRVA will function?
PaRRVA is designed on a simple principle—investors should be able to trust the performance data they are shown. Under the framework, a SEBI-registered Credit Rating Agency (CRA) will act as PaRRVA, working in coordination with a recognised stock exchange designated as the PaRRVA Data Centre (PDC).
Both the PaRRVA and the PDC will independently verify historical returns using a transparent and standardised methodology to ensure accuracy and consistency.
To safeguard investors, intermediaries will not be allowed to selectively highlight only favourable verified returns of any product or service.
The disclosures will be limited to specified time periods, preventing arbitrary date selection to create misleading performance narratives.
Oversight and initial implementation
The operations of PaRRVA and the PDC will be supervised by an Oversight Committee, which will ensure strict adherence to the published verification methodology and uphold data privacy standards.
In its initial phase, the PaRRVA framework will apply to SEBI-registered Investment Advisers, Research Analysts, and stock brokers offering algorithmic trading services.
Going forward, investors will gain access to uniform, comparable, and clearly disclosed performance information across these segments—helping them make more informed and confident investment decisions.
