Sebi Implements New Framework for Verifying Investment Performance Data
Sebi sets deadlines for advisers to verify past performance data
Business Standard
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The Securities and Exchange Board of India (Sebi) has launched the Past Risk and Return Verification Agency (PaRRVA) framework to standardize investment performance reporting. Investment advisers and research analysts must register by August 3, 2024, to continue sharing verified performance data, with a complete transition expected by May 2028.
- 01Sebi has operationalized the PaRRVA framework to standardize investment performance reporting.
- 02Care Ratings is recognized as the first PaRRVA, with the National Stock Exchange serving as the Data Centre.
- 03Investment advisers must enroll with PaRRVA by August 3, 2024.
- 04Post-May 2028, only PaRRVA-verified metrics can be communicated to clients.
- 05The initiative aims to eliminate misleading claims in investment performance data.
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The Securities and Exchange Board of India (Sebi) has initiated the Past Risk and Return Verification Agency (PaRRVA) framework, designed to standardize the reporting and verification of investment performance across India's securities market. In a circular released on Wednesday, Sebi announced that Care Ratings has been designated as the first PaRRVA, while the National Stock Exchange (NSE) will function as the PaRRVA Data Centre (PDC). The platform is set to go live on May 4, 2024, after completing its pilot phase. Investment advisers (IAs) and research analysts (RAs) are required to enroll with PaRRVA by August 3, 2024, to continue providing certified past performance data to clients. From May 2028, only metrics verified by PaRRVA will be permissible for client communication, and historical performance data from the pre-PaRRVA period will be prohibited. This initiative aims to prevent misleading claims and ensure consistency in how investment performance data is presented to investors.
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This framework will enhance transparency in investment performance reporting, potentially leading to more informed investment decisions by clients.
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