SEBI Permits IAs and RAs to Share Certified Past Performance Data Before PaRRVA Launch

Circular No. HO/38/12/11(1)2025-MIRSD-POD/ I/73/2025, Dated: 30.10.2025

1. Background

The Securities and Exchange Board of India (SEBI), through its circular dated April 4, 2025, had specified the framework for creation and operationalisation of the Past Risk and Return Verification Agency (PaRRVA).

PaRRVA has been conceptualised to verify and standardise the performance data of Investment Advisers (IAs) and Research Analysts (RAs), addressing the industry’s long-standing demand for a credible and transparent mechanism to display their performance records.

2. Original Framework under PaRRVA

As per the April 2025 circular:

• PaRRVA will carry out verification of risk and return data prospectively, i.e., only for the period after the IAs/RAs are on-boarded with the agency.
• This ensures uniformity, accuracy, and comparability of performance data disseminated by IAs and RAs to investors.

However, the framework did not initially provide a mechanism for IAs/RAs to communicate their past performance data (i.e., data prior to PaRRVA’s operationalisation) to clients, leading to requests for regulatory clarity.

3. Representations from Industry Associations

Following the issuance of the framework, SEBI received representations from industry associations of IAs and RAs seeking permission to share verified past performance data with clients for the period preceding the operationalisation of PaRRVA.

The associations highlighted the importance of historical data for client evaluation, relationship continuity, and performance transparency.

4. SEBI’s Decision – Conditional Permission for Past Data Sharing

Considering the industry representations, SEBI has now permitted Investment Advisers (IAs) and Research Analysts (RAs) to:

• Communicate past performance data (i.e., for the period prior to PaRRVA’s operationalisation) to clients,
• Only upon specific client request, and
• Strictly on a one-to-one basis (i.e., not for general or public display).

This relaxation allows professionals to respond to client queries while maintaining data integrity and compliance discipline.

5. Certification and Disclosure Requirements

To ensure authenticity and consistency, SEBI has mandated that:

1. The past performance data must be certified by a practising member of the Institute of Chartered Accountants of India (ICAI) or the Institute of Cost Accountants of India (ICMAI).
2. The communication must include a specified disclaimer clarifying that:

• • The performance data pertains to a period prior to PaRRVA verification, and
  • The figures have been certified independently but not verified by PaRRVA.

This certification mechanism provides a safeguard against misrepresentation or selective disclosure of unverified performance claims.

6. Enrolment Requirement with PaRRVA

To continue using such certified past performance data, SEBI has mandated that:

• All IAs and RAs must enrol with PaRRVA within three months of its operationalisation.
• Failure to do so will disqualify them from using or communicating even certified past data to clients.

This ensures that all regulated entities eventually transition to the PaRRVA ecosystem for uniform performance reporting.

7. Objective and Impact

The relaxation seeks to:

• Facilitate a smooth transition to the PaRRVA framework,
• Enable continuity of client engagement for IAs and RAs,
• Maintain credibility and verification integrity in performance communication, and
• Support the broader goal of transparency and accountability in India’s investment advisory and research ecosystem.

8. Conclusion

By permitting certified communication of past performance data on a client-request basis, SEBI has balanced industry concerns with the need for regulatory oversight.

The move ensures that Investment Advisers and Research Analysts can maintain trust and transparency with clients while gradually adopting the PaRRVA framework for standardised and verified performance reporting going forward.

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