Description

SEBI grants Care Ratings Limited recognition as PaRRVA with NSE as data centre, setting May 4, 2026 as the service launch date and mandating Investment Advisers and Research Analysts to enroll by August 3, 2026.

Summary

SEBI has operationalised the Past Risk and Return Verification Agency (PaRRVA) by granting recognition to Care Ratings Limited (CRL), with National Stock Exchange India Limited (NSE) designated as the PaRRVA Data Centre (PDC). CRL will begin providing services on a regular basis from May 4, 2026. Investment Advisers (IAs) and Research Analysts (RAs) who wish to communicate certified past performance data to clients must enroll with PaRRVA by August 3, 2026, and may use pre-PaRRVA period performance data only until May 3, 2028.

Key Points

  • Care Ratings Limited (CRL) recognised as PaRRVA; NSE designated as PaRRVA Data Centre (PDC)
  • PaRRVA services to go live on regular basis from May 04, 2026, following successful pilot completion
  • IAs/RAs must enroll with PaRRVA by August 03, 2026 to continue communicating certified past performance data to clients
  • Post May 03, 2028, IAs/RAs may only use PaRRVA-verified risk and return metrics; pre-PaRRVA period performance data will no longer be permitted in any client communication
  • Oversight committee composition has been revised to include representatives of PaRRVA, PDC, intermediaries/regulated persons, SEBI-recognised investor associations, and an eminent individual
  • Recognition of CRL as PaRRVA is valid until revoked or suspended by SEBI

Regulatory Changes

  • Care Ratings Limited formally recognised as PaRRVA under Regulation 12A of the SEBI (Credit Rating Agencies) Regulations, 1999, read with Regulation 16E of the SEBI (Intermediaries Regulations), 2008
  • Oversight committee composition prescribed in paragraph 27 of the April 4, 2025 circular has been revised based on representations received from PaRRVA and PDC regarding practical challenges
  • The interim arrangement for communicating pre-PaRRVA certified past performance data (permitted under October 30, 2025 circular) now has a firm sunset date of May 03, 2028

Compliance Requirements

  • Investment Advisers (IAs) and Research Analysts (RAs): Must enroll with PaRRVA by August 03, 2026 if they wish to communicate any certified past performance data to clients (including prospective clients); failure to enroll by this date will prohibit such communication thereafter
  • Post May 03, 2028: IAs/RAs must use only PaRRVA-verified risk and return metrics in all client communications; use of pre-PaRRVA period performance data is prohibited
  • Credit Rating Agencies (CRAs): May seek recognition as PaRRVA in accordance with the framework established in the April 4, 2025 circular
  • Stock Exchanges, Clearing Corporations, Depositories, AMFI, Stock Brokers, Algo Providers: Noted as addressees; must take note of the PaRRVA operationalisation framework

Important Dates

  • April 29, 2026: Circular issued; Care Ratings Limited recognition as PaRRVA announced
  • May 04, 2026: CRL begins providing PaRRVA services on a regular basis
  • August 03, 2026: Deadline for IAs/RAs to enroll with PaRRVA (three months from operationalisation) to retain ability to communicate certified past performance data
  • May 03, 2028: Sunset date for use of pre-PaRRVA certified past performance data in any client communication by IAs/RAs

Impact Assessment

This circular has moderate operational impact on Investment Advisers and Research Analysts who currently use or plan to use historical performance data in client-facing communications. The two-year transition window (until May 2028) provides reasonable time to migrate to PaRRVA-verified metrics, but the August 2026 enrollment deadline creates a near-term compliance action item. Firms that miss the enrollment window will lose the ability to communicate any certified past performance data, which could affect their marketing and client onboarding processes. The designation of Care Ratings Limited as PaRRVA and NSE as PDC establishes a clear institutional structure for performance data verification. No direct impact on listed securities or trading operations is anticipated.

Impact Justification

Operationalises a new regulatory verification agency affecting IAs and RAs who wish to communicate certified past performance data to clients, with concrete enrollment and sunset deadlines.