Sebi nudges brokerage firms to join return verification platform

Only four qualified stock brokers have joined the PaRRVA platform so far, while several industry players have raised concerns over high costs and limited adoption

The Securities and Exchange Board of India (Sebi) has been nudging brokerages to join its past return verification initiative. Participation from the broking industry remains tepid despite the platform’s operationalisation in May, amid concerns over high costs and low adoption, according to sources.

 

The initiative, called the Past Risk and Return Verification Agency (PaRRVA), was approved last year. Care Ratings is the verification agency, while the National Stock Exchange (NSE) serves as the PaRRVA data centre.

 

The agency is tasked with independently verifying the historical risk and return metrics of market intermediaries, including research analysts, investment advisers and algo providers. Once verified, these intermediaries can showcase their performance to clients.

 

 

So far, only four qualified stock brokers (QSBs) — brokers with a significant market presence — have enrolled on the platform. Total participation across intermediaries stands at around 360, including more than 250 research analysts and around 110 investment advisers, sources said.

 

For comparison, India had around 2,270 registered research analysts and 1,048 investment advisers as of October 11, according to Sebi data.

 

While the platform was operationalised in May, commercial reporting services were rolled out in September, sources said.

 

With adoption remaining tepid, Sebi has been encouraging brokerages to participate more actively. Algo providers are also yet to enrol on PaRRVA, sources added.

 

“We believe everything about this platform is great, except its cost,” said an industry participant, who did not wish to be named. “The platform requires high amounts to be paid for these services every year, which may make the industry hesitant to participate,” the person added.

 

Queries emailed to Sebi remained unanswered till the time of going to press.

 

According to the CarePaRRVA website, Groww, HDFC Securities, Angel One and SMC Global are the four QSBs onboarded so far.

 

QSBs offering investment advisory or research analyst services can either pay a fixed annual fee of around ₹1 crore or opt for usage-based pricing, at around ₹12.5 lakh for each recommendation category: portfolio, rebalancing, single stocks, derivatives and intraday calls.

 

For a trading member, the fee is around ₹40 lakh annually or ₹5 lakh per recommendation, with lower charges for members with fewer clients.

 

“Since the commercial launch on May 4, 2026, onboarding on the PaRRVA platform has remained robust. Sebi has been highly supportive of the industry’s efforts to join the platform, recognising that wider adoption will strengthen transparency and benefit the entire ecosystem,” said Pankaj D Prasade, director and head of PaRRVA at Care Ratings.

 

Under the framework, investment advisers and research analysts are required to register on the platform and route their investment calls through it during a 90-day cooling-off period.

 

After this period, verified performance metrics can be displayed on the platform and on the advisers’ and analysts’ own platforms.

 

Given that brokerages have multiple analysts making recommendations across intraday, short-term and long-term strategies, as well as fundamental, technical and derivatives-based calls, their participation in PaRRVA could help improve transparency in equity markets.

 

In a circular issued in late April, Sebi said investment advisers (IAs) and research analysts (RAs) wishing to communicate certified past performance data to clients, including prospective clients, must enrol with PaRRVA within three months of its operationalisation.

 

Those who fail to do so will not be permitted to communicate certified past performance data to clients after the three-month period.

 

The regulator has also stipulated that, two years after PaRRVA’s operationalisation, IAs and RAs will be permitted to communicate or display only PaRRVA-verified risk and return metrics. They will no longer be allowed to use past performance data from the period before the platform’s operationalisation in communications with clients, including prospective clients.