Sebi will create performance validation agency to verify better returns.

Mumbai: As part of the broader efforts of Securities and Exchange Board of India (SEBI) to facilitate and streamline the registration and operational processes for intermediaries, the regulator will soon have a performance validation agency for investors to verify all claims of market outperformance.

At present, mutual funds and portfolio managers report their performance every quarter, but those claims are self-verified and not vetted by independent agencies. Introducing a performance validation agency, suggested by SEBI in August 2023, will ensure a dedicated agency validating such claims, thereby enhancing transparency and trust in the market.

“You will soon see the performance validation agency,” said SEBI Chairperson Madhabi Puri Bhuch at a capital market conference organised by industry lobby Ficci here on Friday.

Praising the National Stock Exchange for its role in an innovative use of technology for affordability, which will enhance the credibility of investment intermediaries, she said exchange has done some brilliant work in this offering the technology support for the proposed performance validation agency.