Regulation 2 - Definitions - Foreign Exchange Management (Transfer Or Issue of Any Foreign Security) Regulations, 2000

Has been superseded vide Notification No. 120/2004 dated 7/7/2004 2. Definitions In these Regulations, unless the context otherwise requires: (a) Act means Foreign Exchange Management Act, 1999, (42 of 1999); (b) authorised dealer means a person authorised as an authorised dealer under sub section (1) of section 10 of the Act; (c) American Depository Receipt (ADR) means a security issued by a bank or a depository in United States of America (USA) against underlying rupee shares of a company incorporated in India; (d) `Core Activity' means activity carried on by an Indian entity which constitutes at least 50% of its average turnover in the previous accounting year; (e) Direct investment outside India means investment by way of contribution to the capital or subscription to the Memorandum of Association of a foreign entity or by way o purchase of existing shares of a foreign entity either by market purchase or private placements or through stock exchanges, but does not include portfolio investment or investment . (f) Financial commitment means the amount of direct investment by way of contribution to equity and loan and 100 per cent of the amount of guarantees issued by an Indian party to or on behalf of its overseas Joint Venture Company or Wholly Owned Subsidiary; (g) Foreign Currency Convertible Bond (FCCB) means a bond issued by an Indian company expressed in foreign currency, and the principal and interest in respect of which is payable in foreign currency; (h) Form means the form annexed to these Regulations; (i) Global Depository Receipt (GDR) means a security issued by a bank or a depository outside India against underlying rupee shares of a company incorporated in India; (j) Host country means the country in which the foreign entity receiving the direct investment from an Indian party is registered or incorporated; (k) Indian party means a company incorporated in India or body created under an Act of Parliament, making investment in a Joint Venture or Wholly Owned Subsidiary abroad, and includes any other entity in India as may be notified by Reserve Bank:- Provided that when more than one such company incorporated or bodies under an Act of Parliament, makes a direct investment in the foreign entity, all such companies or bodies together shall constitute the Indian party ; (l) Investment banker means an Investment banker registered with the Securities and Exchange Commission in USA, or the Financial Services Authority in UK, or appropriate regulatory authority in Germany, France, Singapore or Japan.; (m) Joint Venture (JV) means a foreign entity formed, registered or incorporated in accordance with the laws and regulations of the host country in which the Indian party makes a direct investment; (n) Mutual Fund means a Mutual Fund referred to in clause (23D) of section 10 of the Income tax Act, 1961; (o) `Net worth' means paid up capital and free reserves; (p) Real estate business' means buying and selling of real estate or trading in transferable development rights (TDRs) but does not include development of townships, construction of residential/commercial premises, roads or bridges; (q) Wholly Owned Subsidiary (WOS) means a foreign entity formed, registered or incorporated in accordance with the laws and regulations of the host country, whose entire capital is held by the Indian party; (r) Agricultural Operations means agricultural operation as defined in the National Bank for Agriculture and Rural Development Act, 1981. (s) Words and expressions used but not defined in these Regulations shall have the meanings respectively assigned to them in the Act.