Regulation 2 - Definitions - Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999

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); (b) associate , in relation to a credit rating agency, includes a person (i) who, directly or indirectly, by himself, or in combination with relatives, owns or controls shares carrying not less than ten percent of the voting rights of the credit rating agency, or (ii) in respect of whom the credit rating agency, directly or indirectly, by itself, or in combination with other persons, owns or controls shares carrying not less than ten percent of the voting rights, or (iii) majority of the directors of which, own or control shares carrying not less than ten percent of the voting rights of the credit rating agency, or (iv) whose director, officer or employee is also a director, officer or employee of the credit rating agency; (c) Board means the Board as defined in clause (a) of sub-section (1) of section 2 of the Act; (d) body corporate means a body corporate as defined in 6 [ clause (11) of section 2 of the Companies Act, 2013 (18 of 2013) ] ; (e) certificate means a certificate of 1 [ 2 [***] registration granted] by the Board under these regulations; 3 [(ei) 4 [***] 12 [ (eii) Change in control 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); ] ] (f) client means any person whose securities are rated by a credit rating agency; (g) company means a company incorporated under the 8 [ Companies Act, 2013 (18 of 2013) ] ; (h) credit rating agency means a body corporate which is engaged in, or proposes to be engaged in, the business of rating of securities 9 [ that are listed or proposed to be listed on a stock exchange recognized by the Board ] ; (i) economic offence means an offence to which the Economic Offences (Inapplicability of Limitation) Act, 1974 (12 of 1974), is applicable for the time being; (j) 5 [* * *] (k) form means any of the forms specified in the First Schedule: (l) fraud has the same meaning as is assigned to it by section 17 of the Indian Contract Act, 1872 (9 of 1872); (m) group companies means group companies as defined in the Monopolies and Restrictive Trade Practices Act, 1969 (54 of 1969); (n) inspecting officer means any one or more persons appointed by the Board under regulation 29; (o) issuer means a person whose securities are proposed to be rated by a credit rating agency; (p) net-worth means the aggregate value of the paid up equity capital and free reserves (excluding reserves created out of revaluation), reduced by the aggregate value of accumulated losses and deferred expenditure not written off, including miscellaneous expenses not written of; (q) rating means an opinion regarding securities, expressed in the form of standard symbols or in any other standardised manner, assigned by a credit rating agency and used by the issuer of such securities, to comply with a requirement specified by these regulations; (r) rating committee means a committee constituted by a credit rating agency to assign rating to a security; (s) regulation means a regulation forming part of these regulations; (t) relative means a relative as defined in 10 [ section 2(77) of the Companies Act, 2013 (18 of 2013) ] ; (u) schedule means any of the schedules appended to these regulations; and (v) securities has the meaning assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956. 11 [ 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 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 for the words registration granted or renewed by SEBI (Credit Rating Agencies) (Amendment) Regulations, 2011 w.e.f. 05.07.2011. 2 The words initial or permanent were omitted by the Securities and Exchange Board of India (Change In Conditions Of Registration Of Certain Intermediaries) (Amendment) Regulations, 2016 w.e.f. 08-12-2016. 3 Inserted by the SEBI (Credit Rating Agencies) (Amendment) Regulations, 2010, w.e.f. 19.03.2010. 4 Omitted by the SEBI (Change in Conditions of Registration of Certain Intermediaries) (Amendment) Regulations, 2011, w.e.f 13.04.2011. Prior to its omission, clause (ei) read as under: (ei) change of status or constitution in relation to a credit rating agency - (i) means any change in its status or constitution of whatsoever nature; and (ii) without prejudice to generality of sub-clause (i), includes- (A) amalgamation, demerger, consolidation or any other kind of corporate restructuring falling within the scope of section 391 of the Companies Act, 1956 (1 of 1956) or the corresponding provision of any other law for the time being in force; (B) change in its managing director or whole-time director; and (C) any change in control over the body corporate; 5 Omitted by the SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002, w.e.f. 27.09.2002. Prior to its omission, clause (j) read as under: enquiry officer means any officer of the Board, or any other person, who is authorised by the Board under regulation 38 . 6. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/29 dated 03-08-2021 before it was read as clause (7) of section 2 of the Companies Act, 1956 (1 of 1956) 7. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/29 dated 03-08-2021 before it was read as Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 8. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/29 dated 03-08-2021 before it was read as Companies Act, 1956 (1 of 1956) 9. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/29 dated 03-08-2021 before it was read as offered by way of public or rights issue 10. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/29 dated 03-08-2021 before it was read as section 6 of the Companies Act, 1956 (1 of 1956) 11. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/29 dated 03-08-2021 before it was read as (2) Words and expressions used and not defined in these regulations, but defined in the Act, shall have the meanings respectively assigned to them in the Act. 12. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/115 dated 17-01-2023 before it was read as, (eii) change in control , in relation to a credit rating agency being a body corporate, means:- (i) if its shares are listed on any recognised stock exchange, change in control as defined under the 7 [ regulations framed under clause (h) of sub-section (2) of section 11 of the Act ] ; (ii) in any other case, change in the controlling interest in the body corporate. Explanation. For the purpose of sub-clause (ii), the expression controlling interest means an interest, whether direct or indirect, to the extent of at least fifty-one per cent of voting rights in the body corporate;