Performance validation

The Securities and Exchange Board of India (Sebi) has released a consultation paper proposing to create an independent “Performance Validation Agency”, or PVA, for tracking and validating any claims of performance related to investment advice given by Sebi-registered intermediaries and other entities such as investment advisors (IAs), research analysts (RAs), portfolio managers, asset management companies, and stockbrokers. Such an agency would be useful to investors, who currently have no means of verifying performances of financial advisors. From the perspective of IAs or RAs also, such a PVA would be useful since it would enable them to credibly showcase performance and thus attract investors. Currently any claims such entities may make could be inflated, or could rely on cherry-picked data, and,