Regulation 2 - Definitions - Securities and Exchange Board of India (Mutual Funds) Regulations, 1996

Definitions. 2. 19 [ (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) 1 [ advertisement shall include all forms of communication issued by or on behalf of the asset management company/mutual fund that may influence investment decisions of any investor/prospective investors;] (c) associate includes a person,- (i) who directly or indirectly, by himself, or in combination with relatives, exercises control over the asset management company or the trustee 20 [ or the sponsor ] , as the case may be, or (ii) in respect of whom the asset management company or the trustee 21 [ or the sponsor ] , directly or indirectly, by itself, or in combination with other persons exercises a control, or (iii) whose director 22 [ except an independent director ] , officer or employee is a director, officer or employee of the asset management company 41 [ : ] 42 [ Provided that the above definition of associate shall not be applicable to such sponsors, which invest in various companies on behalf of the beneficiaries of insurance policies or such other schemes as may be specified by the Board from time to time. ] 23 [ (d) asset management company means a company formed and registered under the Companies Act 1956 (1 of 1956) or Companies Act, 2013 (18 of 2013) and approved by the Board under sub regulation (2) of regulation 21; ] (e) broker means a stock broker as defined in Securities and Exchange Board of India 24 [ (Stock Brokers) Regulations, 1992 ] ; 2 [(ea) capital protection oriented scheme means a mutual fund scheme which is designated as such and, which 25 [ endeavours ] to protect the capital invested therein through suitable orientation of its portfolio structure;] (f) close-ended scheme means any scheme of a mutual fund in which the period of maturity of the scheme is specified; (g) control means,- (i) in the case of a company any person 26 [ ,either individually or together with persons acting in concert, ] who directly or indirectly own, control or hold shares carrying not less than 10% of the voting rights of such company; or (ii) as between two companies, if the same person 27 [ , either individually or together with persons acting in concert, ] directly or indirectly, own, control or hold shares carrying not less than 10% of the voting rights of each of the two companies; or (iii) majority of the directors of any company who are in a position to exercise control over the asset management company; (h) custodian means a person who has been granted a certificate of registration to carry on the business of custodian of securities under the Securities and Exchange Board of India (Custodian of Securities) Regulations, 1996; (i) depository means a body corporate as defined in the Depositories Act, 1996 (22 of 1996); (j) economic offence means an offence to which the Economic Offences ( 28 [ Inapplicability of Limitation ] ) Act, 1974 (12 of 1974), applies for the time being; 29 [ (ja) equity related instruments include convertible debentures, convertible preference shares, warrants carrying the right to obtain equity shares, equity derivatives and such other instrument as may be specified by the Board from time to time; (jb) exchange traded fund means a mutual fund scheme that invests in securities in the same proportion as an index of securities and the units of exchange traded fund are mandatorily listed and traded on exchange platform; ] (k) 3 [***] (l) form means any of the forms specified as such in the First Schedule; 30 [ (m) fraud means a fraud as defined in clause (c) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003; ] 4 [(ma) fund of funds scheme means a mutual fund scheme that invests primarily in other schemes of the same mutual fund or other mutual funds;] 5 [(mb) gold exchange traded fund scheme shall mean a mutual fund scheme that invests primarily in gold or gold related instruments; (mc) gold related instrument shall mean such instrument having gold as underlying, as may be specified by the Board from time to time;] 17 [ (md) goods means the goods notified by the Central Government under clause (bc) of section 2 of the Securities Contracts (Regulation) Act, 1956 and forming the underlying of any commodity derivative; ] 31 [ (mm) group means a group as defined in clause (b) of the Explanation to Section 5 of the Competition Act, 2002 (12 of 2003). ] 7 [(mn) index fund scheme means a mutual fund scheme that invests in securities in the same proportion as an index of securities;] 8 [(mo) InvIT or Infrastructure Investment Trust shall have the meaning assigned in clause (za) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014;] (n) inspecting officer means any person appointed as such by the Board under Chapter VIII; 43 [ (na) Liquid networth means the networth deployed in liquid assets which are unencumbered and shall include cash, money market instruments, Government Securities, Treasury bills, Repo on Government securities and any other like instruments as specified by the Board from time to time. ] 48 [ (nb) market abuse includes manipulative, fraudulent and unfair trade practices which may contravene Section 12A of the Act or any of the provisions of the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 or the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; ] (o) money market instruments includes commercial papers, commercial bills, treasury bills, Government securities having an unexpired maturity up to one year, call or notice money, certificate of deposit, usance bills, and any other like instruments as specified by the Reserve Bank of India from time to time; (p) money market mutual fund means a scheme of a mutual fund which has been set up with the objective of investing exclusively in money market instruments; 39 [ (q) mutual fund means a fund established in the form of a trust to raise monies through the sale of units to the public or a section of the public under one or more schemes for investing in securities, money market instruments, gold or gold related instruments, silver or silver related instruments, real estate assets and such other assets and instruments as may be specified by the Board from time to time: Provided that infrastructure debt fund schemes may raise monies through private placement of units, subject to conditions specified in these regulations: Provided further that mutual fund schemes investing in exchange traded commodity derivatives may hold the underlying goods in case of physical settlement of such contracts. ] 45 [ (qa) NAV or Net Asset Value shall mean the value computed in the manner provided in sub-regulation (1) of regulation 48 of these regulations; ] 33 [ 44 [ (qb) ] networth means the aggregate of the paid up capital and free reserves after deducting therefrom, miscellaneous expenditure to the extent not written off or adjusted or deferred revenue expenditure, intangible assets and accumulated losses; ] (r) offer document means any document by which a mutual fund invites public for subscription of units of a scheme; (s) open-ended scheme means a scheme of a mutual fund which offers units for sale without specifying any duration for redemption; 12 [(sa) private placement means any offer of units of a mutual fund scheme or invitation to subscribe such units to a select group of persons, by a mutual fund (other than by way of public offer) through issue of a placement memorandum and which is not being calculated to result, directly or indirectly in the units becoming available for subscription or purchase by persons other than those receiving the offer or invitation;] 13 [(sb) REIT or Real Estate Investment Trust shall have the meaning assigned in clause (zm) of sub-regulation 1 of regulation 2 of the Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014;] 14 [ 15 (sc) real estate mutual fund scheme means a mutual fund scheme that invests directly or indirectly in real estate assets or other permissible assets in accordance with these regulations;] 34 [ (t) relative means a person as defined in section 2(77) of the Companies Act, 2013 (18 of 2013); ] (u) scheme means a scheme of a mutual fund launched under Chapter V; (v) schedule means any of the schedules annexed to these regulations; 35 [ (w) securities laws means the Act, the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and the Depositories Act, 1996 (22 of 1996), the provision of any other law to the extent it is administered by the Board and the relevant rules and regulations made thereunder; ] 40 [ (wa) silver exchange traded fund scheme shall mean a mutual fund scheme that invests primarily in silver or silver related instruments; (wb) silver related instrument shall mean such an instrument as may be specified by the Board from time to time, which has silver as the underlying product; ] (x) sponsor means any person who, 36 [ acting individually or in concert ] with another body corporate, establishes a mutual fund; 16 [(y) 46 [ trustees mean the trustee company that holds the property of the mutual fund in trust for the benefit of the unit holders: ] ] 47 [ Provided that trustees in the form of a board of trustees shall convert to a trustee company within a period of one year from the date of notification of the provision of these amendment regulations, with the prior approval of the Board. ] 37 [ Explanation: In the event the trusteeship of the mutual fund is with a trustee company, wherever the context requires applicability of provisions for individual trustees, the term trustees under these regulations shall be deemed to mean the directors of board of the trustee company. ] (z) unit means the interest of the unit holders in a scheme, which consists of each unit representing one undivided share in the assets of a scheme; (z)(i) unit holder means a person holding unit in a scheme of a mutual fund. 38 [ (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 Companies Act, 2013 (18 of 2013), the Depositories Act, 1996 (22 of 1996), 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 by the SEBI (Mutual Funds) (Amendment) Regulations, 2012, w.e.f. 21-2-2012. Prior to its substitution, clause (b) read as under; (b) advertisement includes every form of advertising, whether in a publication, by display of notices, signs, labels or by means of circulars, catalogues or other documents, by an exhibition of pictures or photographic films, by way of sound broadcasting or television, or in any other manner; 2 Inserted by the SEBI (Mutual Funds) (Third Amendment) Regulations, 2006, w.e.f. 3-8-2006. 3 Omitted by SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002, w.e.f. 27-9-2003. Prior to omission clause (k) read as under; (k) enquiry officer means any person appointed as such by the Board under chapter ix; 4 Inserted by the SEBI (Mutual Funds) (Amendment) Regulations, 2003, w.e.f. 29-5-2003. 5 Inserted by the SEBI (Mutual Funds) (Amendment) Regulations, 2006, w.e.f. 12-1-2006. 6 Inserted by the SEBI (Mutual Funds) (Amendment) Regulations, 2003, w.e.f. 29-5-2003.. 7 Inserted by the SEBI (Mutual Funds) ((Second Amendment) Regulations, 2007, w.e.f.31-10-2007. 8 Inserted by the SEBI (Mutual Funds) (Amendment) Regulations, 2017, w.e.f. 15-02-2017. 9 Substituted by the SEBI (Mutual Funds) (Amendment) Regulations, 2008, w.e.f. 16-4-2008. Prior to its substitution , clause (q) read as under; (q) mutual fund means a fund established in the form of a trust to raise monies through the sale of units to the public or a section of the public under one or more schemes for investing in securities, including money market instruments *[or gold or gold related instruments]; [*Inserted by the SEBI (Mutual Funds) (Amendment) Regulations, 2006, w.e.f. 12-1-2006] 10 Substituted for ; by the SEBI (Mutual Funds) (Amendment) Regulations, 2013, w.e.f. 16-4-2013. 11 Inserted by the SEBI (Mutual Funds) (Amendment) Regulations, 2013, w.e.f. 16-4-2013. 12 Inserted by the SEBI (Mutual Funds) (Amendment) Regulations, 2013, w.e.f. 16-4-2013. 13 Inserted by the SEBI (Mutual Funds) (Amendment) Regulations, 2017, w.e.f. 15-02-2017. 14 Renumbered by the SEBI (Mutual Funds) (Amendment) Regulations, 2013, w.e.f. 16-4-2013. The clause was inserted by the SEBI (Mutual Funds) (Amendment) Regulations, 2008, w.e.f. 16-4-2008. 15 Renumbered by the SEBI (Mutual Funds) (Amendment) Regulations, 2017, w.e.f. 15-02-2017. 16 Substituted by the SEBI (Mutual Funds) (Amendment) Regulations, 1999, w.e.f. 8-12-1999. Prior to its substitution , clause (y) read as under; (y) trustee means a person who holds the property of the mutual fund in trust for the benefit of the unitholders and includes a trustee company and the directors of the trustee company; 17 Inserted vide NOTIFICATION No. SEBI/LAD-NRO/GN/2019/011 dated 26-04-2019 18 Inserted vide NOTIFICATION No. SEBI/LAD-NRO/GN/2019/011 dated 26-04-2019 19. Numbered vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021 20. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021 21. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021 22. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021 23. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021 before it was read as (d) asset management company means a company formed and registered under the Companies Act, 1956 (1 of 1956) and approved as such by the Board under sub-regulation (2) of regulation 21; 24. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021 before it was read as (Stock Brokers and Sub-brokers) Rules, 1992 25. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021 before it was read as endeavour s 26. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021 before it was read as or combination of persons 27. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021 before it was read as or combination of persons 28. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021 before it was read as Limitation of Prosecution 29. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021 30. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021 before it was read as, (m) fraud for the purpose of these regulations has the same meaning as is assigned to it in section 17 of the Indian Contract Act, 1872 (9 of 1872); 31. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021 before it was read as 6 [(mm) group means a group as defined in clause (ef) of section 2 of the Monopolies and Restrictive Trade Practices Act, 1969 (54 of 1969);] 32. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021 before it was read as 9 [(q) mutual fund means a fund established in the form of a trust to raise monies through the sale of units to the public or a section of the public under one or more schemes for investing in securities including money market instruments or gold or gold related instruments or real estate assets 10 [:]] 18 [ Provided further that mutual fund schemes investing in exchange traded commodity derivatives may hold the underlying goods in case of physical settlement of such contracts. ] 11 [Provided that infrastructure debt fund schemes may raise monies through private placement of units, subject to conditions specified in these regulations;] 33. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021 34. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021 before it was read as (t) relative means a person as defined in section 6 of the Companies Act, 1956 (1 of 1956); 35. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021 before it was read as (w) securities laws means the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and the Depositories Act, 1996 (22 of 1996), including their amendments and such other laws as may be enacted from time to time; 36. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021 before it was read as acting alone or in combination 37. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021 38. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/08 dated 04-02-2021 w.e.f. 30th day from the date of their publication in the Official Gazette, that is 04-02-2021 39. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/56 dated 09-11-2021 w.e.f. 09-12-2021 before it was read as, 32 [ (q) mutual fund means a fund established in the form of a trust to raise monies through the sale of units to the public or a section of the pubic under one or more schemes for investing in securities, money market instruments, gold or gold related instruments, real estate assets and such other assets and instruments as may be specified by the Board from time to time: ] 40. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/56 dated 09-11-2021 w.e.f. 09-12-2021 41. Substituted vide Notification No. SEBI/LAD-NRO/GN/2022/92 dated 03-08-2022 shall come into force on the thirtieth day from the date of their publication in the Official Gazette before it was read as, ; 42. Inserted vide Notification No. SEBI/LAD-NRO/GN/2022/92 dated 03-08-2022 shall come into force on the thirtieth day from the date of their publication in the Official Gazette 43. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/134 dated 26-06-2023 w.e.f. 01-08-2023 44. Re-Numbered vide Notification No. SEBI/LAD-NRO/GN/2023/134 dated 26-06-2023 w.e.f. 01-01-2024 before it was read as, (qa) 45. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/134 dated 26-06-2023 w.e.f. 01-01-2024 46. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/134 dated 26-06-2023 w.e.f. 01-01-2024 before it was read as, trustees mean the Board of Trustees or the Trustee Company who hold the property of the Mutual Fund in trust for the benefit of the unit holders; 47. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/134 dated 26-06-2023 w.e.f. 01-01-2024 48. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/197 dated 01-08-2024 shall come into force upon the completion of three months from the date of publication of these regulations in the Official Gazette