SEBI Activates PaRRVA Framework: Verified Performance Disclosures Now Mandatory for Investment Advisers, Research Analysts and Algo Providers

The Securities and Exchange Board of India has taken a decisive step toward cleaning up performance-related communications in the securities market by formally operationalising the Past Risk and Return Verification Agency (PaRRVA). With CARE Ratings Limited appointed as the designated agency and the National Stock Exchange of India Limited functioning as the data infrastructure backbone, the framework is now transitioning from its pilot phase into full-scale operations effective May 4, 2026.

This development carries significant compliance implications for registered Investment Advisers (IAs), Research Analysts (RAs), Stock Brokers (SBs), and exchange-empanelled algorithmic trading providers. Understanding the timelines, obligations, and structural changes under this framework is essential for all regulated entities operating in the Indian securities market.

Background: Why PaRRVA Was Created

For years, a persistent concern in India's retail investment landscape has been the unchecked and often misleading performance claims made by intermediaries in their marketing and advisory communications. Selective reporting of returns, cherry-picked timeframes, and unverified track records have historically misled investors into making poorly informed decisions.

To address this structural gap, SEBI introduced the PaRRVA framework through its circular SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/51 dated April 4, 2025, which laid down the regulatory architecture for recognising and operationalising a dedicated verification agency. The framework was designed to ensure that any past performance data communicated to clients — whether existing or prospective — would first be independently verified and certified.

The regulatory authority for this initiative flows from Section 11(1) of the Securities and Exchange Board of India Act, 1992, read with an array of SEBI regulations including Regulation 16D, Regulation 16E, and Regulation 16F of the SEBI (Intermediaries) Regulations, 2008, Regulation 33 of the SEBI (Research Analysts) Regulations, 2014, Regulation 29 of the SEBI (Investment Advisers) Regulations, 2013, Regulation 50 of the SEBI (Stock Brokers) Regulations, 2026, Regulation 12A of the SEBI (Credit Rating Agencies) Regulations, 1999, and Regulation 38B of the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018.

Recognition of PaRRVA and Its Operational Structure

Designated Agency and Data Centre

Following the issuance of the April 2025 framework circular, Care Ratings Limited (CRL) was formally granted recognition as PaRRVA. This recognition was granted in accordance with Regulation 12A of the SEBI (Credit Rating Agencies) Regulations, 1999 read with Regulation 16E of the SEBI (Intermediaries) Regulations, 2008.

Simultaneously, National Stock Exchange India Limited (NSE) was designated to serve as the PaRRVA Data Centre (PDC) — the technological and data management layer that supports the verification ecosystem.

The recognition granted to CRL shall remain valid until such time as it is expressly revoked or suspended by SEBI.

Pilot Phase and Full Operationalisation

A pilot phase of PaRRVA was launched on December 8, 2025, during which the systems, processes, and protocols were tested and refined. Upon successful conclusion of this pilot phase, CRL commenced providing its services on a regular, full-scale basis from May 4, 2026.

This operationalisation serves a dual purpose — it allows regulated entities to publicly showcase verified performance metrics, and simultaneously equips investors with access to independently authenticated data when evaluating advisory or research services.