Regulation 7 - Capital Adequacy Requirement - Securities and Exchange Board of India (Portfolio Managers) Regulations, 1993

1 [7. Capital Adequacy Requirement.─ The capital adequacy requirement referred to in clause (g) of regulation 6 shall not be less than the networth of 2 [two crore rupees]: 3 [Provided that a portfolio manager, who was granted a certificate under these regulations prior to the commencement of the Securities and Exchange Board of India (Portfolio Managers) (Amendment) Regulations, 2008, shall raise its networth to not less than one crore rupees within six months from such commencement and to not less than two crore rupees within six months thereafter: Provided further that the portfolio manager shall fulfill capital adequacy requirement under these regulations, separately and independently, of capital adequacy requirements, if any, foreach activity undertaken by it under the relevant regulations.] Explanation.─ For the purposes of this regulation, networth means the aggregate value of paid up equity capital plus 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 off.] ******** 1 Substituted by the SEBI (Portfolio Managers) (Amendment) Regulations, 2002, w.e.f. 11-10-2002. Prior to substitution, regulation 7 read as under: 7. Capital Adequacy requirement.─ The capital adequacy requirement referred to in sub-regulation (d) of regulation 6 shall not be less than the networth of Rupees fifty lacs of the person making the application; Explanation.─ For the purposes of this regulation, networth means in the case of an applicant which is a partnership firm or a body corporate, the value of a capital contributed to the business of such firm or the paid up equity capital of such body corporate and plus free reserves as the case may be at the time of making application under sub-regulation (1) of regulation 3. 2 Words fifty lacs rupees substituted for the words two crore rupees by the SEBI (Portfolio Managers) (Amendment) Regulations, 2008, w.e.f. 11-08-2008. 3 Inserted, ibid.