The Securities and Exchange Board of India (SEBI) launched the Past Risk and Return Verification Agency (PaRRVA) on Monday, introducing a new independent mechanism designed to verify the historical returns of registered market intermediaries. This initiative aims to enhance transparency within India’s securities market.
SEBI’s Chairman, Tuhin Kanta Pandey, announced that PaRRVA will establish “a pioneering mechanism for SEBI-registered intermediaries to showcase verified past returns to investors.” He stated that with this launch, India is setting a new international benchmark for transparency, accountability, and investor protection.
Developed with the support of a recognized stock exchange serving as the PaRRVA Data Centre and a SEBI-registered credit rating agency acting as the verifier, PaRRVA creates a standardized framework for validating performance claims made by Investment Advisers (IAs), Research Analysts (RAs), and stockbrokers providing algorithmic trading services. The regulator hopes this system will help address the issue of unverified or inflated claims commonly associated with unregistered operators and social media influencers known as “finfluencers.”
Pandey highlighted the risks posed by unregistered entities, which attract investors with exaggerated performance claims, while regulated intermediaries are restricted from citing past returns. He pointed out the challenges in performance reporting, noting that “finfluencers often lure investors with exaggerated or fabricated returns,” alongside “unscrupulous intermediaries” exacerbating investor uncertainty.
According to findings from SEBI’s recent investor survey, only 36% of investors possess adequate knowledge about the securities market, while nearly 62% of prospective investors make decisions based on finfluencer advice. Additionally, 23% are primarily motivated by the allure of quick gains. These findings underscore the necessity for credible performance data to manage expectations and encourage responsible investing.
Pandey explained that PaRRVA is founded on the principle that “investors deserve performance numbers they can trust.” The verification will be conducted collaboratively by the PaRRVA agency and the Data Centre, utilizing a transparent and standardized methodology. Intermediaries will be prohibited from selectively showcasing favorable periods or arbitrarily choosing dates to present positive outcomes.
PaRRVA will be overseen by a dedicated committee focused on ensuring compliance with the verification process and maintaining data privacy. The initial phase of the system will focus on IAs, RAs, and algorithmic trading brokers, with verified performance data presented in a uniform format that includes clear disclosures.
Pandey affirmed that the agency’s digital audit trails, reduction in mis-selling, and consistent reporting standards will help foster trust in India’s financial markets.
Published on December 8, 2025.
