The Securities and Exchange Board of India on Wednesday operationalised the Past Risk and Return Verification Agency (PaRRVA) framework, designating Care Ratings Limited as the first such agency.
The regulator said Care Ratings will begin providing PaRRVA services on a regular basis from May 4, 2026, following completion of a pilot phase.
The recognition will remain valid unless revoked or suspended by SEBI.
The National Stock Exchange (NSE) will act as the data centre.
The initiative is designed to allow regulated entities to present verified performance metrics, while enabling investors to access reliable and standardised data for informed decision-making.
PaRRVA will validate the past risk and return claims related to investment advisory services, research services and algorithmic trading offerings.
The move is expected to improve transparency and curb misleading performance disclosures in the securities market.
SEBI said investment advisers (IAs) and research analysts (RAs) seeking to communicate certified past performance data to clients have to enrol with PaRRVA within three months of its operationalisation, setting a deadline of August 3, 2026.
“Else such IAs/RAs will not be able to communicate certified past performance data to clients post three months from the date of operationalization of PaRRVA,” the circular said.
The regulator further clarified that such entities will be allowed to communicate certified past performance data only up to May 3, 2028.
Beyond this date, IAs and RAs can communicate or display only PaRRVA verified risk and return metrics and not the historical data from the pre-PaRRVA period.
SEBI also revised the composition of the oversight committee supervising PaRRVA and the PaRRVA Data Centre (PDC), following representations regarding practical challenges.
Under the revised norms, the committee will include representatives from PaRRVA, the PDC, intermediaries or regulated entities, a SEBI-recognised investor association, and an eminent individual with regulatory experience as chairperson.
The committee must have at least five members, with independent members forming a majority over representatives of PaRRVA and the PDC.