Sebi pushes brokers to adopt return verification platform amid slow uptake

The Securities and Exchange Board of India (Sebi) is intensifying efforts to encourage brokerage firms to adopt the PaRRVA (Platform for Return Reconciliation, Verification and Acknowledgement) platform, which aims to streamline return verification processes in the securities market. However, the initiative has gained limited traction, with only four qualified stock brokers joining the platform to date.

The slow adoption reflects growing concerns within the brokerage industry about the financial burden and practical challenges associated with the platform. Several market participants have flagged elevated implementation costs as a significant deterrent, while others worry about the limited number of existing users, which reduces the immediate value proposition for new joiners. These concerns have created a chicken-and-egg dynamic that threatens to hinder the platform's growth.

Sebi's push comes as part of broader efforts to modernize India's capital markets infrastructure and improve operational efficiency across market participants. The regulator views the PaRRVA platform as a critical tool for reducing discrepancies in return reporting and enhancing transparency across the ecosystem. However, industry experts suggest that addressing cost concerns and demonstrating tangible benefits through broader adoption will be essential to accelerate participation rates.

Market observers note that regulatory mandates or incentive structures may be needed to overcome current resistance. The regulator is expected to engage further with industry stakeholders to identify viable solutions that balance market modernization goals with practical concerns about implementation feasibility and cost-effectiveness.