SEBI operationalises PaRRVA framework

• The Securities and Exchange Board of India (SEBI) has operationalised the Past Risk and Return Verification Agency (PaRRVA) framework.

• It is a regulatory initiative designed to bring transparency and standardisation to performance claims made by financial intermediaries.

• It ensures that all risk-return metrics presented to investors are independently verified and compliant with SEBI guidelines, creating a trustworthy ecosystem for investment advisory services.

• CARE Ratings Limited has been granted recognition as the PaRRVA, while National Stock Exchange of India Limited (NSE) will function as the PaRRVA Data Centre (PDC), in line with the regulatory framework issued on April 4, 2025.

• A pilot phase of the system was launched on December 8, 2025. 

• Following the successful completion of the pilot, PaRRVA will commence full-scale operations from May 4, 2026.

• 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 performance claims related to investment advisory services, research services and algorithmic trading offerings. 

• Moreover, regulated entities will be allowed to use such verified data in advertisements, subject to applicable regulatory guidelines.

• The move is expected to curb misleading claims and bring greater accountability among intermediaries.

(The author is a trainer for Civil Services aspirants.)