Regulation 2 - Definitions. - Securities and Exchange Board of India (Investment Advisers) Regulations 2013

Definitions. 2. (1) In these regulations, unless the context otherwise requires, the terms defined herein shall bear the meanings assigned to them below, and their cognate expressions shall be construed accordingly, (a) Act means the Securities and Exchange Board of India Act, 1992 (15 of 1992); 10 [ (aa) accreditation agency shall have the same meaning as assigned to it in clause (aa) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012; (ab) accredited investor shall have the same meaning as assigned to it under clause (ab) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012; ] 1 [ 9 [ (ac) ] assets under advice shall mean the aggregate net asset value of securities 12 [ **** ] for which the investment adviser has rendered investment advice irrespective of whether the implementation services are provided by investment adviser or concluded by the client directly or through other service providers; ] (b) Board means the Securities and Exchange Board of India established under section 3 of the Act; (c) body corporate shall have the meaning assigned to it in or 2 [ under sub-section (11) of section 2 of the Companies Act, 2013 (18 of 2013); ] (d) certificate means a certificate of registration granted under these regulations; 11 [ (e) Change in control (i) in case of a body corporate (A) if its shares are listed on any recognised stock exchange, shall be construed with reference to the definition of control in terms of regulations framed under clause (h) of sub-section (2) of section 11 of the Act; (B) if its shares are not listed on any recognised stock exchange, shall be construed with reference to the definition of control as provided in sub-section (27) of Section 2 of the Companies Act, 2013 (18 of 2013); (ii) in a case other than that of a body corporate, shall be construed as any change in its legal formation or ownership or change in controlling interest. Explanation For the purpose of sub-clause (ii), the expression controlling interest means an interest, direct or indirect, to the extent of not less than fifty percent of voting rights or interest; ] (f) company means a company incorporated under the Companies Act, 1956 3 [ or Companies Act, 2013 ] ; (g) consideration means any form of economic benefit including non-cash benefit, received or receivable for providing investment advice; 4 [ 13 [ **** ] (gb) family of client shall include individual client, dependent spouse, dependent children and dependent parents; (gc) family of an individual investment adviser shall include individual investment adviser, spouse, children and parents; ] (h) financial planning shall include analysis of clients current financial situation, identification of their financial goals, and developing and recommending financial strategies to realise such goals; (i) firm means a partnership firm registered under Indian Partnership Act, 1932 (9 of 1932); (j) form means any of the forms set out in the First Schedule; (k) inspecting authority means any one or more persons appointed by the Board to exercise powers conferred under regulation 23; (l) investment advice means advice relating to investing in, purchasing, selling or otherwise dealing in securities 14 [ **** ] and advice on investment portfolio containing securities 14A [ **** ] whether written, oral or through any other means of communication for the benefit of the client and shall include financial planning: Provided that investment advice given through newspaper, magazines, any electronic or broadcasting or telecommunications medium, which is widely available to the public shall not be considered as investment advice for the purpose of these regulations; 15 [ Provided further that trading calls shall not be considered as investment advice for purpose of these regulations. ] (m) investment adviser means any person, who for consideration, is engaged in the business of providing investment advice to clients or other persons or group of persons and includes 16 [ a part-time investment adviser or ] any person who holds out himself as an investment adviser, by whatever name called; (n) limited liability partnership means a partnership formed and registered under The Limited Liability Partnership Act, 2008(6 of 2009); (o) NBFC means a Non-Banking Financial Company regulated by Reserve Bank of India; (p) NISM means the National Institute of Securities Market established by the Board; 5 [ (pa) non-individual means a body corporate including a limited liability partnership and a partnership firm; ] 17 [ (pb) other business activity or employment means such business activity or employment which is not related to securities and: a. it does not involve handling or managing of money or funds of client or person; or b. it is not related to providing advice or recommendation to any client or person in respect of any products or assets for investment purposes; ] (q) partner means partner of the firm or a limited liability partnership who renders investment advice on behalf of the firm or limited liability partnership; 18 [ (qa) part-time investment adviser means an individual or a firm, who for consideration, is engaged in the business of providing investment advice and is also engaged in any other business activity or employment; ] 6 [ (r) persons associated with investment advice shall mean any member, partner, officer, director or employee or any sales staff of such investment adviser including any person occupying a similar status or performing a similar function irrespective of the nature of association with the investment adviser who is engaged in providing investment advisory services to the clients of the investment adviser; Explanation. - All client-facing persons such as sales staff, service relationship managers, client relationship managers, etc., by whatever name called shall be deemed to be persons associated with investment advice, but do not include persons who discharge clerical or office administrative functions where there is no client interface. ] 19 [ (s) principal officer in case of non-individual investment adviser engaged: (i) solely in providing investment advisory services, shall mean the managing director or designated director or managing partner or executive chairman of the board or equivalent management body who is responsible for the overall function of the business and operations of non-individual investment adviser; (ii) in the activities other than investment advisory services, through separate departments/divisions, may be the person at the management level who is a business head or unit head, responsible for the overall function of the business and operations related to investment advisory services: Provided that in case of non-individual investment adviser being a partnership firm, one of the partners shall be designated as its principal officer: Provided further that where no partner of firm registered as an investment adviser has minimum qualification and certification requirements provided in these regulations, it shall apply for registration as an investment adviser in the form of a limited liability partnership or a body corporate within such time as may be specified by the Board. Explanation . The provisions of sub clause (i) shall also be applicable to the principal officer of a non-individual entity registered both as an investment adviser and a research analyst but engaged in no other business activity. ] 20 [ (t) research analyst means any person registered under Securities and Exchange Board of India (Research Analysts) Regulations, 2014; (u) trading calls shall have the same meaning as assigned to it under clause (zc) of sub-regulation (1) of regulation (2) of the Securities and Exchange Board of India (Research Analysts) Regulations, 2014. ] (2) The words and expressions used and not defined in these regulations but defined in the Act, the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the 8 [ Companies Act, 2013 (18 of 2013) ] , or any rules or regulations made thereunder shall have the same meanings respectively assigned to them in those Acts, rules or regulations made thereunder or any statutory modification or re-enactment thereto, as the case may be. ************* NOTES:- 1. Inserted vide Notification No. SEBI/LAD-NRO/GN/2020/22 dated 03-07-2020 2. Substituted vide Notification No. SEBI/LAD-NRO/GN/2020/22 dated 03-07-2020 before it was read as, under sub-section (7) of section 2 of the Companies Act, 1956 (1 of 1956); 3. Inserted vide Notification No. SEBI/LAD-NRO/GN/2020/22 dated 03-07-2020 4. Inserted vide Notification No. SEBI/LAD-NRO/GN/2020/22 dated 03-07-2020 5. Inserted vide Notification No. SEBI/LAD-NRO/GN/2020/22 dated 03-07-2020 6. Substituted vide Notification No. SEBI/LAD-NRO/GN/2020/22 dated 03-07-2020 before it was read as, (r) representative means an employee or an agent of an investment adviser who renders investment advice on behalf of that investment adviser. 7. Inserted vide Notification No. SEBI/LAD-NRO/GN/2020/22 dated 03-07-2020 8. Substituted vide Notification No. SEBI/LAD-NRO/GN/2020/22 dated 03-07-2020 before it was read as Companies Act, 1956 (1 of 1956) 9. Re-Numbered vide Notification No. SEBI/LAD-NRO/GN/2021/34 dated 03-08-2021 before it was read as (aa) 10. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/34 dated 03-08-2021 11. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/115 dated 17-01-2023 before it was read as, (e) change in control in relation to a company or a body corporate, means: (i) if its shares are listed on any recognized stock exchange, change in control within the meaning of clause (e) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; (ii) in any other case, change in the controlling interest or change in legal form. Explanation. For the purpose of sub-clause (ii), the expression controlling interest means an interest, whether direct or indirect, to the extent of more than fifty percent of voting rights or interest; 12. Omitted vide Notification No. SEBI/LAD-NRO/GN/2024/219 dated 16-12-2024 before it was read as, and investment products 13. Omitted vide Notification No. SEBI/LAD-NRO/GN/2024/219 dated 16-12-2024 before it was read as, (ga) CPE means continuing professional education in terms of clause (f) of sub regulation (1) of regulation 2 of the SEBI (Certification of Associated Persons in the Securities Markets) Regulations, 2007; 14. Omitted vide Notification No. SEBI/LAD-NRO/GN/2024/219 dated 16-12-2024 before it was read as, or investment products, 14A. Omitted vide Notification No. SEBI/LAD-NRO/GN/2024/219 dated 16-12-2024 before it was read as, or investment products, 15. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/219 dated 16-12-2024 16. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/219 dated 16-12-2024 17. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/219 dated 16-12-2024 18. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/219 dated 16-12-2024 19. Substituted vide Notification No. SEBI/LAD-NRO/GN/2024/219 dated 16-12-2024 before it was read as, 7 [ (s) principal officer shall mean the managing director or designated director or managing partner or executive chairman of the board or equivalent management body who is responsible for the overall function of the business and operations of non-individual investment adviser. ] 20. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/219 dated 16-12-2024