Securities and Exchange Board of India (SEBI) has operationalised Past Risk and Return Verification Agency (PaRRVA) framework to strengthen transparency, standardisation, and investor protection in financial markets. Under this system, CARE Ratings Limited has been recognised as PaRRVA, while the National Stock Exchange of India Limited will act as the PaRRVA Data Centre (PDC).
What is PaRRVA?
PaRRVA is a dedicated verification agency and data infrastructure designed to ensure the accuracy of past risk and return metrics claimed by financial market entities.
Objective: It aims to bring accountability and uniformity to performance disclosures across the financial ecosystem.
Key Features
- This initiative introduces a structured mechanism to validate and authenticate past performance claims made by regulated entities, enabling investors to access credible, verified data for better decision-making.
- It also allows market participants to use verified performance metrics in advertisements in compliance with regulatory norms.
- Designated Institutions: CARE Ratings Limited acts as the verification agency, while NSE serves as the central data repository (PDC).
- Scope of Verification: Covers performance claims of
- Investment advisers
- Research analysts
- Algorithmic trading service providers
- Advertisement Compliance: Only PaRRVA-verified data can be used in promotional materials, ensuring regulatory compliance.
- Standardised Reporting: Establishes a uniform framework for presenting authenticated performance metrics.
- Operational Timeline:
- Framework issued: April 4, 2025
- Pilot phase: December 8, 2025
- Full operational launch: May 4, 2026
Regulatory Significance
- Strengthens investor protection by reducing misleading or unverifiable performance claims.
- Enhances data-driven oversight in financial markets.
- Promotes transparency and credibility in investment-related communications.
Aligns with SEBI’s broader objective of tightening disclosure norms and accountability standards.