New Delhi: In a major step toward enhancing transparency in India’s financial markets, SEBI has launched the Past Risk and Return Verification Agency (PaRRVA), giving investors access to independently authenticated historical returns of registered market intermediaries. The initiative—developed with the National Stock Exchange of India and CAREEdge Ratings—is the first of its kind globally.

PaRRVA introduces a uniform method for verifying performance claims made by Investment Advisers (IAs), Research Analysts (RAs) and other registered entities. The move aims to tackle the growing issue of unverified or inflated claims circulating widely, particularly from unregistered operators who often influence investor behaviour.

Addressing the launch, SEBI chairman Tuhin Kanta Pandey said, "We are taking an important step today to strengthen the integrity and transparency of India's securities market. The launch of PaRRVA, Past Risk and Return Verification Agency, introduces a pioneering mechanism for SEBI registered intermediaries to showcase verified past returns to investors."
 

At present, SEBI regulations prevent registered intermediaries from sharing past performance data—even when accurate—while unregistered market players face no such restriction. This regulatory imbalance allows unregulated influencers and platforms to promote unrealistic return claims, drawing inexperienced investors into risky decisions. Conversely, regulated professionals with genuine performance histories are unable to demonstrate their track record.

PaRRVA aims to correct this skew by offering an independent and credible verification system, enabling regulated entities to present validated performance data and helping investors distinguish between authentic track records and misleading claims.

A recent SEBI investor survey highlighted major gaps in financial literacy: only 36 per cent of Indian investors possess adequate market knowledge, while over 62 per cent depend on influencers for guidance.

In addition, nearly a quarter of prospective investors pursue high returns without understanding underlying risks—leaving them highly vulnerable to deceptive marketing.

By providing transparent, validated information, PaRRVA seeks to empower investors to assess risk more responsibly and make informed decisions.

Pandey emphasised that although several countries acknowledge the dangers of unchecked performance advertising, India is the first to establish a dedicated, independent verification framework. He said the initiative positions PaRRVA as a "global benchmark for transparency, accountability and investor protection”. He further described it as a "pioneering mechanism" that fosters ethical conduct and strengthens trust in India’s securities market.

ANI