Home / Business and Economy / Sebi Nudges Brokers: Low PaRRVA Uptake Sparks Concern
Sebi Nudges Brokers: Low PaRRVA Uptake Sparks Concern
12 Oct
Summary
- Sebi urges brokers to join past return verification initiative.
- High costs and low adoption are key concerns for PaRRVA.
- Only four qualified stock brokers have joined the platform.
The Securities and Exchange Board of India (Sebi) is actively promoting participation in its Past Risk and Return Verification Agency (PaRRVA) initiative among brokerage firms. Despite the platform becoming operational in May, broker engagement remains subdued due to concerns over high costs and limited adoption.
PaRRVA, with Care Ratings as the verification agency and the National Stock Exchange (NSE) as the data centre, verifies historical risk and return metrics for market intermediaries. However, only four qualified stock brokers have enrolled, alongside approximately 370 other intermediaries, including research analysts and investment advisers.
Sources indicate that the substantial annual cost, estimated at ₹1 crore for some, is a significant deterrent. While commercial reporting began in September, Sebi continues to urge greater brokerage involvement to enhance transparency in equity markets.
Under the framework, intermediaries must register and route investment calls through PaRRVA. Verified performance data can then be displayed, strengthening trust and market integrity. Failure to comply by late April could restrict the communication of certified past performance data.
