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SEBI Performance Validation Agency Framework

7 April 20251 min read
BANKING & FINANCESEBI PerformanceValidation AgencyFramework7 April 2025safalsetu.com

Why in the news

The Securities and Exchange Board of India (SEBI) released the working rules for a new Performance Validation Agency (PVA), meant to curb exaggerated or misleading return claims made in advertising.

Key facts

  • Body: SEBI, the securities market regulator.
  • New entity: Performance Validation Agency (PVA).
  • Applies to research analysts and investment advisers.
  • They must get past-performance claims verified by the PVA before putting them in advertisements.
  • SEBI supervises how the PVA is set up and works, and checks compliance with the guidelines.

Objective and significance

  • Ensure advertised performance is accurate, protecting investors and market integrity.
  • Build transparency and trust by giving investors verified information.

Exam angle

  • Regulator: SEBI.
  • Entities covered: research analysts and investment advisers.
  • Purpose of PVA: validate performance claims in ads.

Test yourself

1. What is the purpose of the Performance Validation Agency framework announced by SEBI?

The PVA checks performance claims made in financial advertisements.

2. Which entities must get performance claims validated by the PVA before advertising?

The framework applies to research analysts and investment advisers.

3. Who oversees the establishment and functioning of the Performance Validation Agency?

SEBI oversees the PVA under the operational framework.

This topic is part of Daily Current Affairs 6 & 7 April 2025 (30 topics).

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