The Securities and Exchange Board of India (“SEBI”), vide its circular dated April 29, 2026, has announced the recognition granted to CARE Ratings Ltd. (“CRL”) to act as the Past Risk and Return Verification Agency (“PaRRVA”) and its imminent operationalization from May 4, 2026. Based on an earlier press release, CRL commenced its verification activities of risk-return metrics on a pilot basis in December, 2025. The pilot is scheduled to be completed by May 4, 2026, following which the PaRRVA will start providing verification services on a regular basis.
To contextualise, PaRRVA was introduced as a concept in March 2025, in response to a growing demand from market players to showcase their performance to investors to enhance their credibility and grow their business. These intermediaries (specifically research analysts, investment advisers and stock brokers) were prohibited under their respective advertisement codes from referring to past performance in advertisements or other communication to investors. Pursuant to amendments to the SEBI (Intermediaries) Regulations, 2008, SEBI allowed Investment Advisers (“IAs”), Research Analysts (“RAs”) and empanelled algo providers to make claims of performance verified by the PaRRVA.
Subsequently, SEBI, through its circular dated April 4, 2025, prescribed a detailed framework for the operationalization of PaRRVA, including eligibility criteria, recognition process, roles and responsibilities, record-keeping requirements, establishment of the oversight committee and so on. The PaRRVA was to function through a principal-agent relationship with a stock exchange, which would act as the PaRRVA Data Centre (“PDC”) and in that capacity, receive input data from intermediaries (in real time or end of day) and provide verified outputs to the PaRRVA. As the principal, PaRRVA would be ultimately responsible for the verification process and decide the verification methodology and other aspects of the process, and disseminate the verified data.
Following the introduction of this framework, SEBI received industry representations seeking to use and display historical performance data pertaining to the period prior to PaRRVA’s impending operationalisation (“pre-PaRRVA period”). To address this, vide its circular dated October 30, 2025, SEBI permitted IAs and RAs to communicate past performance data for the pre-PaRRVA period, so long as it is communicated to clients on a one-to-one basis, and certified by a member of the Institute of Chartered Accountants of India or the Institute of Cost Accountants of India along with mandatory disclaimers. IA/RAs opting for this interim arrangement were required to enrol with the PaRRVA within 3 months of its operationalization. Once operationalized, the performance of any research product or advice could only showcased post verification by the PaRRVA.
Key timelines and takeaways:
With SEBI having formally announced the operationalization of PaRRVA from May 4, 2026, here are the key timelines that IA/RAs displaying performance data would need to keep track of:
• IAs and RAs can only communicate certified past performance data (under the interim arrangement) for the period prior to May 4, 2026.
• Performance data for any advice, strategy or research recommendations provided to clients on or after May 4, 2026, shall strictly be verified through the PaRRVA framework. Accordingly, such performance claims cannot be communicated or displayed unless the intermediary is enrolled with PaRRVA and the data has been duly verified.
• IAs and RAs who intend to continue communicating certified past performance data to clients for the pre-PaRRVA period (i.e., before May 4, 2026) would have to compulsorily enrol with CRL by August 3, 2026. If an IA/RA fails to enrol with CRL by August 3, 2026, such IA/RA would not be allowed to display certified past performance data post 3 months from the date of operationalization.
• After enrolment, IAs and RAs can keep displaying certified past performance data for the pre-PaRRVA period to existing and prospective clients up to May 3, 2028. Thereafter, IAs and RAs will be permitted to disclose only PaRRVA-verified risk and return metrics, and any reference to performance data pertaining to the period prior to May 4, 2026 will not be permissible.
