New Delhi, April 30 -- The Securities and Exchange Board of India has said Care Ratings Ltd will start providing services as Past Risk and Return Verification Agency (PaRRVA) on a regular basis from May 4.

In a circular issued on April 30, the regulator said that the pilot phase that ran for a little over a year has been successfully completed.

The agency was set up last April 4 to compute the risk-return metrics of regulated market intermediaries, such as investment advisors or research analysts, so that these verified metrics can then be used by the regulated entities to get more clients. Until the agency was set up, these intermediaries were not allowed to advertise performance claims or returns estimates.

SEBI also named the National Stock Exchange as the PaRRVA Data Centre (PDC), which will hold various responsibilities including developing and hosting of the verification system, processing of verification request based on the defined methodology, storing and managing data with appropriate security standards and providing support to PaRRVA to handle and address investors' queries and grievances.

Oversight committee

The circular also announced changes made, based on market feedback, to the oversight committee for the agency and the PDC.

Earlier, managing directors of PaRRVA and PDC were excluded from the committee and public interest directors of the PDC were included. The new rules do not specify these inclusions and exclusions.

Moreover, earlier the committee's chairperson was to be one of the public interest directors of the PDC. The new rules say any eminent individual with substantial regulatory experience can be the chairperson.

Earlier, the combined representation of the public interest directors of the PDC and representatives of regulated persons had to equal the combined representation of the non-independent directors of PaRRVA and PDC. In the new rules, there is no mandate of having public interest directors on the committee, and there should be at least two representatives from the intermediaries and regulated persons.

The committee itself should have at least five members, according to the new rules.

Advisors and analysts

Investment advisors and research analysts who wish to communicate certified past performance to clients have been asked to enroll with PaRRVA by August 3, 2026. They can communicate certified past performance data to clients only up to May 3, 2028.

Published by HT Digital Content Services with permission from VC Circle.