Sebi’s PaRRVA Launch: Know How This Verification Agency Can Protect Investors From Fake Claims

The size of the Indian securities market is growing as the total number of demat accounts grew to a record high of 210 million in October 2025. Additionally, the number of unique investors crossed 12 crore. Technology has played a key part in aiding this participation.

Amid this surge in participation in the securities market, technology has also been increasingly used to mislead investors via social media content. However, the Securities and Exchange Board of India (Sebi) has come up with a new initiative to combat the issue called Past Risk and Return Verification Agency (PaRRVA).

On December 8, the capital market regulator officially inaugurated the pilot launch of the PaRRVA platform. The platform seeks to provide investors a tool to differentiate between genuine historical returns and misleading or exaggerated claims.

Here’s a look at how PaRRVA works and how it can help investors in not getting misled by false and fraudulent claims made on social media platforms regarding the past performance:

What Is PaRRVA?

PaRRVA functions as an independent verification mechanism. The tool is aimed at helping investors in checking the claims regarding past performance made by Sebi-registered intermediaries like Investment Advisors (IAs), Research Analysts (RAs) and other providers of algorithmic trading services. The platform seeks to provide retail investors access to credible, standardized, and unbiased data which can help them see through the marketing hype and misleading claims which are often made on social media by market intermediaries.

How Does PaRRVA Work?

At present, investors who wish to check the claims made by Sebi registered finfluencers can only do so by self-verifying them. However, the PaRRVA platform seeks to change that by offering a way to verify the claims via a "trusted source" system. PaRRVA sources data like trade executions and transaction records from the exchanges and clearing corporations. Speaking at the launch of the pilot project for PaRRVA, Ashishkumar Chauhan, MD and CEO of NSE, said the tool draws data directly from exchanges and clearing corporations.

"PaRRVA is a complex framework based on authenticated data directly sourced from the exchanges and clearing corporations," Chauhan said at the event.

Once the data has been derived it goes to the PaRRVA Data Centre (PDC). At the PDC the verification engine checks the authenticity of the data by deploying a pre-defined and transparent methodology.

"The validation engine will compute close to 50 different risk and return metrics and provides investment performance reports," Chauhan said.

Thus the tool helps in providing verifiable data and stops intermediaries from manipulating how performance is measured. Speaking at the event Mahul Pandya, MD and Group CEO, CARE Ratings, highlighted the same.

"This is built on three core principles... standardization versus customization [and] completeness as against cherrypicking," Pandya said.

Additionally the framework puts in place stringent reporting rules to make sure that the output is fair and honest. While the tool can be used to show historical returns, Sebi Chairman Tuhin Kanta Pandey has warned against cherry picking and displaying favorable returns or show performance only in specific time periods.

"Further, the verified performance would be for specified periods and arbitrary selection of dates or time-periods to present favourable outcomes would not be permitted,” Pandey said.

According to the market regulator, the data related to the performance of the intermediaries will be shown in a uniform format across all verified entities. This in turn is expected to allow retail investors to compare different strategies and investment professionals on a true like-for-like basis. The Sebi Chairman said that the verified report will be accessible to investors through a dedicated website and a simple QR code embedded in the marketing material of the intermediary such as videos or social media posts.

“Investors can also view the reports by scanning QR code or using a link directing investors to the official PaRRVA portal," Pandey said.

Why Was PaRRVA Introduced?

Earlier in 2025, the market regulator identified a rising trend of unregistered entities and "finfluencers" luring investors with unverified, often fabricated, claims of high past returns.

"Performance reporting in securities markets has long posed risks for investors. Finfluencers often lure investors with exaggerated or fabricated returns. Unregistered entities make unverified claims, drawing investors away from regulated intermediaries. Well-regulated entities struggle to attract investors despite genuine track records," Pandey said.

At present, the market regulator’s norms prevent Sebi-registered intermediaries from showcasing past performance, even when legitimate. However, this leads to a disparate situation wherein unregistered entities illegally display returns whereas registered entities are prevented from showing returns.

"The launch of PaRRVA, Past Risk and Return Verification Agency, introduces a pioneering mechanism for Sebi-registered intermediaries to showcase verified past returns to investors," Pandey said.

How PaRRVA Helps Retail Investors?

PaRRVA is likely to help retail investors by aiding them in making better investment decisions. The elimination of fake or exaggerated performance claims is likely to help third-party verified source to check the authenticity of a financial professional's track record before investing with them. On the other hand, the tool also enables genuine intermediaries to truthfully showcase their track records to add to their credibility. Pandey believes this can lead investors to invest with registered entities and drive them away from investing with unregistered entities.

"If we can enable registered intermediaries to communicate their performance, which is validated, it will allow investors to take informed decisions," Pandey said.