SEBI announces setting up of Past Risk and Return Verification Agency

SEBI has stated that in order to facilitate persons regulated by the Board or their agents to market their services to investors using their risk - return metrics, the Board has approved the proposal to recognise a Past Risk and Return Verification Agency (PaRRVA) which shall verify the risk - return metrics in respect of services of such persons or their agents. A Credit Rating Agency (CRA) shall act as PaRRVA with a recognized stock exchange serving as PaRRVA Data Centre (PDC). PaRRVA shall carry out the verification of risk - return metrics for Investment Advisors (IAs), Research Analysts (RAs) and Algorithmic Trading, and those persons permitted by the Board to offer these services. It noted that the risk return metrics verification shall be made only on a prospective basis from the effective date of opting for the PaRRVA service. Initially, PaRRVA shall be operational on pilot basis for a period of two months, SEBI noted.

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