Regulation 2 - Definitions - Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003

Definitions 2. (1) In these regulations, unless the context otherwise requires,- (a) Act means the Securities and Exchange Board of India Act, 1992 (15 of 1992); 1 [ (b) dealing in securities includes: (i) an act of buying, selling or subscribing pursuant to any issue of any security or agreeing to buy, sell or subscribe to any issue of any security or otherwise transacting in any way in any security by any persons including as principal, agent, or intermediary referred to in section 12 of the Act 4 [ , either by themselves or through mule accounts ] ; (ii) such acts which may be knowingly designed to influence the decision of investors in securities ; and (iii) any act of providing assistance to carry out the aforementioned acts ] (c) fraud includes any act, expression, omission or concealment committed whether in a deceitful manner or not by a person or by any other person with his connivance or by his agent while dealing in securities in order to induce another person or his agent to deal in securities, whether or not there is any wrongful gain or avoidance of any loss, and shall also include- (1) a knowing misrepresentation of the truth or concealment of material fact in order that another person may act to his detriment; (2) a suggestion as to a fact which is not true by one who does not believe it to be true; (3) an active concealment of a fact by a person having knowledge or belief of the fact; (4) a promise made without any intention of performing it; (5) a representation made in a reckless and careless manner whether it be true or false; (6) any such act or omission as any other law specifically declares to be fraudulent, (7) deceptive behaviour by a person depriving another of informed consent or full participation, (8) a false statement made without reasonable ground for believing it to be true. (9) the act of an issuer of securities giving out misinformation that affects the market price of the security, resulting in investors being effectively misled even though they did not rely on the statement itself or anything derived from it other than the market price. And fraudulent shall be construed accordingly; Nothing contained in this clause shall apply to any general comments made in good faith in regard to- (a) the economic policy of the government (b) the economic situation of the country (c) trends in the securities market; (d) any other matter of a like nature whether such comments are made in public or in private; (d) Investigating Authority means any 2 [ person ] authorized by the Board to undertake investigation under section 11C of the Act; or 5 [ (da) mule account includes a trading account maintained with a stock broker or a dematerialised account or bank account linked with such trading account in the name(s) of a person, where the account is effectively controlled by another person, whether or not the consideration for transactions in the account are paid by such other person; ] (e) securities means securities as defined in section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956). 3 [ (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 Depositories Act, 1996 (22 of 1996), the 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. Substituted vide Notification No. SEBI/LAD-NRO/GN/2018/56 dated 31-12-2018 w.e.f. 01-02-2019 before it was read as, (b) dealing in securities includes an act of buying, selling or subscribing pursuant to any issue of any security or agreeing to buy, sell or subscribe to any issue of any security or otherwise transacting in any way in any security by any person as principal, agent or intermediary referred to in section 12 of the Act. 2. Substituted vide Notification No. SEBI/LAD-NRO/GN/2020/08 dated 13-03-2020 before it was read as, officer of the Board not below the rank of Division Chief, 3. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/71 dated 25-01-2022 before it was read as, (2) Words and expressions used and not defined in these regulations, but defined in the Act or in the rules or regulations made thereunder, shall have the meanings respectively assigned to them in the Act or rules or regulations made thereunder, as the case may be. 4. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/187 dated 27-06-2024 5. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/187 dated 27-06-2024