India’s securities regulator has formed a new agency that seeks to reduce the risk of investors being given unverified performance claims for securities.
The Past Risk and Return Verification Agency will independently verify past returns using a “transparent and standardised methodology”, the Securities and Exchange Board of India (Sebi) says in a statement on December 8.
According to Tuhin Kanta Pandey, chairman of the regulator, India is “setting a new international benchmark for transparency, accountability and investor protection” with the launch of the agency.
He notes that performance reporting in securities markets has long posed risks for investors.
“Finfluencers often lure investors with exaggerated or fabricated returns. Unscrupulous intermediaries further fuel investor uncertainty with exaggerated claims,” he says.
Intermediaries will not be permitted to selectively display the agency’s verified returns or specific product or service in order to protect investors from false claims.
Pandey says the agency will be monitored by an oversight committee whose main focus is to ensure that it adheres to published verification methodology and maintains data privacy.
