CIRCULAR
HO/38/14/(4)2026-MIRSD-POD/I/10557/2026 April 29, 2026
To,
All Registered Credit Rating Agencies (“CRAs”)
All Registered Investment Advisers (“IAs”)
All Registered Research Analysts (“RAs”)
All Registered Stock Brokers (“SBs”)
All Recognised Stock Exchanges (“SEs”)
All Recognised Clearing Corporations (“CCs”)
All Recognised Depositories
Association of Mutual Funds in India (“AMFI”)
All exchange empanelled Algo Providers through Stock Brokers
Dear Sir/Madam,
Subject: Operationalisation of Past Risk and Return Verification Agency
(“PaRRVA”)
Background
1. SEBI, vide circular no. SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/51 dated April 4,
2025, specified the framework for recognition and operationalisation of PaRRVA.
As specified in the said circular, A CRA may be recognized as a PaRRVA, in terms
of Regulation 12A of the ‘SEBI (Credit Rating Agencies) Regulations, 1999’
(“CRA Regulations”) read with Regulation 16E of the SEBI (Intermediaries
Regulations), 2008 (“Intermediaries Regulations”) and such CRA shall engage with
a recognized SE which will serve as the PaRRVA Data Centre (“PDC”).
Recognition of PaRRVA
2. In pursuance of the above circular, Care Ratings Limited (“CRL”) has been granted
recognition as PaRRVA, with National Stock Exchange India Limited (“NSE”)
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acting as PDC. The recognition shall be valid until it is revoked or suspended by
SEBI.
3. Post successful completion of the pilot-phase, CRL shall begin providing its
services on regular basis from May 04, 2026.
Communication of certified past performance by IAs/RAs to clients
4. SEBI, vide circular no. HO/38/12/11(1)2025-MIRSD-POD/I/73/2025 dated October
30, 2025, as an interim arrangement, permitted IAs/RAs to communicate certified
past performance data of the period prior to operationalization of PaRRVA (“pre-
PaRRVA period”) to a client, in accordance with the provisions laid down in the
said circular. The circular inter alia also mandates the following:
4.1. IAs/RAs who wish to communicate certified past performance data to clients
(including prospective clients) must enroll with PaRRVA within three months of
its operationalization, else such IAs/RAs will not be able to communicate
certified past performance data to clients post three months from the date of
operationalization of PaRRVA.
4.2. After two years from the date of operationalization of PaRRVA, IAs/RAs will be
permitted to communicate/display only PaRRVA verified risk and return
metrics and will not be permitted to use past performance data related to
the period prior to the date of operationalization of PaRRVA, in any
communication to clients (including prospective clients).
5. In view of the above, it is specified that-
5.1. IAs/RAs who wish to communicate certified past performance data to clients
(including prospective clients) must enroll with PaRRVA by August 03, 2026.
5.2. IAs/RAs may communicate certified past performance data to clients (including
prospective clients), only up to May 03, 2028.
Change in composition of Oversight Committee
6. Paragraph 27 of the SEBI Circular no. SEBI/HO/MIRSD/MIRSD-
PoD/P/CIR/2025/51 dated April 4, 2025 mandates PaRRVA to constitute an
oversight committee to oversee the activities of the CRA as PaRRVA and the Stock
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Exchange as PDC. The said para also prescribed the composition of the oversight
committee.
7. Based on receipt of representations from PaRRVA and PDC regarding the
challenges faced in constitution of the committee, the proposed composition of the
oversight committee has been revised as under:
7.1. The committee may consist of representatives of PaRRVA, PDC,
intermediaries/regulated persons and SEBI recognised investor association
and an eminent individual having substantial regulatory experience as
Chairperson of the committee.
7.2. The PaRRVA representative/s shall be of the designation ‘Executive Director’
or ‘Senior Director’ and should have requisite experience, capabilities, and
expertise to contribute effectively to the committee.
7.3. The PDC representative/s shall be preferably at the CXO level1, to ensure
strategic oversight and operational alignment, and should possess the
requisite experience, capabilities, and expertise to contribute effectively to the
committee.
7.4. Member/s representing at least two of the intermediaries/regulated persons.
8. The committee shall consist of a minimum of five members and may be expanded
by PaRRVA to include more members if required. However, the total number of
independent members (i.e. Chairperson, representatives of
intermediaries/regulated persons and investor association) shall be more than the
total number of representatives of PaRRVA and PDC.
Compliance by regulated persons
9. The provisions of Paragraph 27 of the SEBI circular dated April 4, 2025 stands
modified to the extent of Paragraph no. 7 and 8 as detailed above. All other
provisions specified in said circular shall continue to remain applicable.
10. This circular is issued in exercise of powers conferred under Section 11(1) of the
Securities and Exchange Board of India Act, 1992 read with
1 CXO means CRO (Chief Regulatory Officer), CTO (Chief Technology Officer), CFO (Chief Financial
Officer) or an official holding similar position in Stock Exchange
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(i) Regulation 16D, 16E and 16F of the Intermediaries Regulations
(ii) Regulation 33 of the Securities and Exchange Board of India(Research
Analysts) Regulations,2014,
(iii) Regulation 29 of the Securities and Exchange Board of India (Investment
Advisers) Regulations,2013,
(iv) Regulation 50 of the Securities and Exchange Board of India (Stock
Brokers) Regulations, 2026,
(v) Regulation 12A of the CRA Regulations and
(vi) Regulation 38B of Securities Contracts (Regulation) (Stock Exchanges and
Clearing Corporations) Regulations, 2018
to protect the interests of investors in securities market and to promote the
development of, and to regulate the securities market.
11. This circular is available on SEBI website at www.sebi.gov.in under the category
"Legal > Circulars.
Yours faithfully,
Aradhana Verma
General Manager
+91-22-26449633
E-mail: aradhanad@sebi.gov.in
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