The Securities and Exchange Board of India through its Circular dated 04 April 2025 and 29th April 2026 has introduced and operationalized the PaRRVA (Past Risk and Return Verification Agency) framework, respectively, bringing a major shift in past performance reporting norms for Investment Advisers (IAs) and Research Analysts (RAs).
This initiative aims to bring transparency, credibility, and standardization in how Investment Advisers (IAs) and Research Analysts (RAs) present their performance to clients.
What is PaRRVA
PaRRVA (Past Risk and Return Verification Agency) is a SEBI-regulated framework under which:
The past performance (returns + risk) shown by IAs and RAs will be verified by an independent agency (CARE Ratings Limited (CRL) recognised as PaRRVA entity) before being presented to investors.
Simple Understanding: PaRRVA acts like an “audit system for performance claims”.
It ensures that:
- Returns shown are true and verifiable
- Risk is properly disclosed
- Data is presented in a standard format
Effective Dates of PaRRVA Mechanism
As per the framework introduced by the Securities and Exchange Board of India, the implementation of the PaRRVA mechanism is subject to the following key timelines:
Commencement of Operations
The recognized PaRRVA entity (CRL) shall begin providing its services on a regular basis from May 04, 2026, post completion of the pilot phase.
Mandatory Enrollment within 3 Months
IAs and RAs who intend to communicate certified past performance data to clients (including prospective clients) are required to Enroll with PaRRVA within three (3) months from the date of its operationalization
Implication:
In case of failure to enroll within the prescribed timeline, such IAs/RAs shall not be permitted to communicate certified past performance data after the expiry of three months from the operational date of PaRRVA.
- Restriction After Two Years
After two (2) years from the date of operationalization of PaRRVA:
- IAs and RAs shall be permitted to communicate/display only PaRRVA-verified risk and return metrics
- They shall not be permitted to use or refer to any past performance data
relating to the period prior to the operationalization of PaRRVA, in any communication to clients (including prospective clients)
Compliance Takeaway
“IAs and RAs must align with PaRRVA within the initial 3-month window, failing which they lose the ability to communicate performance data, and post 2 years, only verified metrics remain permissible.”
How will the PaRRVA Mechanism Work? (Indicative Process)
While SEBI has prescribed the regulatory framework, obligations, and outcome, it has not provided a detailed step-by-step operational flow. However, based on the framework, the mechanism is expected to function broadly as follows:
- Submission to PaRRVA
Such performance data will need to be submitted to the PaRRVA in the prescribed format, as may be specified under the framework.
- Independent Verification
The PaRRVA will undertake verification of the submitted data, including validation of returns, risk parameters, and consistency of records, in line with SEBI-prescribed standards.
- Standardization of Metrics
Post verification, the data is expected to be standardized into uniform risk-return metrics, enabling comparability across different IAs and RAs.
- Generation of Verified Output
Based on the verification process, a validated performance output/report may be generated, which can be used for disclosure purposes.
This becomes the only legally acceptable performance record.
- Permitted Use and Disclosure
IAs and RAs shall be permitted to use only such PaRRVA-verified performance data in their:
- Client communications
- Marketing materials
- Public disclosures
- Ongoing Compliance
The framework indicates a shift towards continuous and system-driven compliance, requiring periodic updates and adherence to prescribed disclosure norms.
This is not one-time—it’s an ongoing compliance system.
Post operationalization of the PaRRVA system, clients and prospective clients will be able to verify performance-related claims of IAs and RAs through QR-based verification under the framework.”
Core Shift in the System
| Earlier System | PaRRVA System |
| Self-reported returns | Independently verified |
| Flexible presentation | Standardized format |
| Selective data | Complete disclosure |
| Marketing-driven | Compliance-driven |
One-Line Summary
👉 “PaRRVA converts performance reporting from a self-declared claim into a verified, standardized, and regulator-controlled disclosure system.”