Context:
The Securities and Exchange Board of India (SEBI) has unveiled an operational framework aimed at establishing a Performance Validation Agency (PVA). This initiative seeks to address and reduce misleading claims about past performance in advertisements related to financial products by research analysts and investment advisers.
Key Highlights of the Framework
- Objective: To ensure that performance claims in financial advertisements are accurate and not misleading, thereby protecting investors and maintaining market integrity.
- Scope: The framework applies to research analysts and investment advisers, requiring them to have their performance claims validated by the PVA before including them in advertisements.
- Implementation: SEBI will oversee the establishment and functioning of the PVA, ensuring compliance with the operational guidelines set forth in the framework.
This move by SEBI is part of a broader effort to enhance transparency and trust in the financial markets by ensuring that investors receive reliable and verified information.
