SEBI Rolls Out PARRVA, a New Tech Driven Risk Return Verification Tool

SEBI has rolled out a new verification system named the Past Risk and Return Verification Agency, or PaRRVA.  

The initiative equips investors with independently validated performance information for SEBI-registered intermediaries, addressing long-standing concerns around unverified or exaggerated return claims in the financial markets. 

A Dedicated Verification Framework 

PaRRVA has been launched in collaboration with the National Stock Exchange of India and CAREEdge Ratings. The framework is designed to authenticate historical performance data submitted by investment advisors, research analysts and other regulated market participants. 

SEBI stated that the objective is to create a transparent and consistent method for assessing past returns so that investors can make decisions based on reliable information. 

During the launch, Chairman Tuhin Kanta Pandey highlighted the growing influence of misleading claims circulating in the market, especially from unregistered entities. He said the new mechanism strengthens the transparency and integrity of the securities market by allowing genuine intermediaries to present verified data to their clients. 

Statements And Market Context 

At present, regulations prevent SEBI-registered intermediaries from showcasing their past performance, even when accurate. This restriction has inadvertently given unregulated players a competitive advantage, as they freely publicise unverified high return claims.  

SEBI’s recent investor study indicated that only a minority of investors have sufficient market understanding, while a significant segment depends on influencers or pursues unrealistic gains without adequate risk awareness. 

PaRRVA has been introduced to bridge this gap by enabling investors to check whether return claims are authentic and consistent with actual performance. The agency will validate both risk and return metrics, helping investors form a more realistic view of an intermediary’s track record. 

Read More: SEBI to Take Decision on 11 Key Proposals: Broker Regulation, Revamp of Mutual Fund Expense and More! 

Conclusion 

PaRRVA marks an important step towards improving transparency, accountability and informed decision making in India’s financial ecosystem. By allowing intermediaries to present verified performance data, SEBI aims to enhance investor confidence and encourage ethical conduct within the market. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.  

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.