Regulation 2 - Definitions - Securities And Exchange Board of India (Portfolio Managers) Regulations, 2020

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 [ (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 means any person who fulfils the eligibility criteria as specified by the Board and is granted a certificate of accreditation by an accreditation agency; ] 3 [ (ac) Alternative Investment Fund shall have the same meaning as assigned to it in clause (b) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012; ] (b) body corporate shall have the meaning assigned to it under sub-section (11) of Section 2 of the Companies Act, 2013 (18 of 2013) as amended from time to time; (c) certificate means a certificate of registration issued by the Board; 8 [ (d) **** ] 9 [ (e) 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) chartered accountant means a chartered accountant as defined in clause (b) of sub-section (1) of section 2 of the Chartered Accountants Act, 1949 (38 of 1949) and who has obtained a certificate of practice under sub-section (1) of section 6 of that Act; 4 [ (fa) Co-investment Portfolio Manager means a Portfolio Manager who is a Manager of a Category I or Category II Alternative Investment Fund(s); and: (i) provides services only to the investors of such Category I or Category II Alternative Investment Fund(s); and (ii) makes investment only in unlisted securities of investee companies where such Category I or Category II Alternative Investment Fund(s) make investments: Provided that the Co-investment Portfolio Manager may provide services to investors from any other Category I or Category II Alternative Investment Fund(s) which are managed by them and are also sponsored by the same Sponsor(s); ] (g) discretionary portfolio manager means a portfolio manager who under a contract relating to portfolio management, exercises or may exercise, any degree of discretion as to the investment of funds or management of the portfolio of securities of the client, as the case may be; (h) eligible fund manager shall have the same meaning as assigned to it in sub-section (4) of Section 9A of the Income-tax Act, 1961; (i) eligible investment fund shall have the same meaning as assigned to it in sub-section (3) of Section 9A of the Income-tax Act, 1961; (j) form means a form specified in Schedule I; (k) 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; (l) inspecting authority means one or more persons appointed by the Board to exercise powers conferred under Chapter V; 2 [ ( la) large value accredited investor means an accredited investor who has entered into an agreement with the portfolio manager for a minimum investment amount of ten crore rupees; ] 5 [ (lb) investee company shall have the same meaning as assigned to it in clause (o) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 ; (lc) Manager shall have the same meaning as assigned to it in clause (q) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012; ] (m) NISM means the National Institute of Securities Market established by the Board; (n) portfolio means the total holdings of securities and goods belonging to any person; (o) portfolio manager means a body corporate, which pursuant to a contract with a client, advises or directs or undertakes on behalf of the client (whether as a discretionary portfolio manager or otherwise) the management or administration of a portfolio of securities or goods or funds of the client, as the case may be: Provided that the Portfolio Manager may deal in goods received in delivery against physical settlement of commodity derivatives. (p) principal officer means an employee of the portfolio manager who has been designated as such by the portfolio manager and is responsible for: - (i) the decisions made by the portfolio manager for the management or administration of portfolio of securities or the funds of the client, as the case may be; and (ii) all other operations of the portfolio manager. 7 [ (pa) related party in relation to a portfolio manager, means- (i) a director, partner or his relative; (ii) a key managerial personnel or his relative; (iii) a firm, in which a director, partner, manager or his relative is a partner; (iv) a private company in which a director, partner or manager or his relative is a member or director; (v) a public company in which a director, partner or manager is a director or holds along with his relatives, more than two per cent. of its paid-up share capital; (vi) any body corporate whose board of directors, managing director or manager is accustomed to act in accordance with the advice, directions or instructions of a director, partner or manager; (vii) any person on whose advice, directions or instructions a director, partner or manager is accustomed to act: Provided that nothing in sub-clauses (vi) and (vii) shall apply to the advice, directions or instructions given in a professional capacity; (viii) any body corporate which is- (A) a holding, subsidiary or an associate company of the portfolio manager; or (B) a subsidiary of a holding company to which the portfolio manager is also a subsidiary; (C) an investing company or the venturer of the portfolio manager; Explanation.-For the purpose of this clause, investing company or the venturer of a portfolio manager means a body corporate whose investment in the portfolio manager would result in the portfolio manager becoming an associate of the body corporate. (ix) a related party as defined under the applicable accounting standards; (x) such other person as may be specified by the Board: Provided that, (a) any person or entity forming a part of the promoter or promoter group of the listed entity; or (b) any person or any entity, holding equity shares: (i) of twenty per cent or more; or (ii) of ten per cent or more, with effect from April 1, 2023; in the listed entity either directly or on a beneficial interest basis as provided under section 89 of the Companies Act, 2013 , at any time, during the immediate preceding financial year; shall be deemed to be a related party; ] (q) securities lending means securities lending as per the Securities Lending Scheme, 1997 specified by the Board. 6 [ (r) Sponsor shall have the same meaning as assigned to it in clause (w) of sub-regulation (1) of regulation 2 of the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012; ] (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. ************* NOTES:- 1. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/31 dated 03-08-2021 2. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/31 dated 03-08-2021 3. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/58 dated 09-11-2021 w.e.f. 09-12-2021 4. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/58 dated 09-11-2021 w.e.f. 09-12-2021 5. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/58 dated 09-11-2021 w.e.f. 09-12-2021 6. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/58 dated 09-11-2021 w.e.f. 09-12-2021 7. Inserted vide Notification No. SEBI/LAD-NRO/GN/2022/94 dated 22-08-2022 w.e.f. thirtieth day from the date of their publication in the Official Gazette 8. Omitted vide Notification No. SEBI/LAD-NRO/GN/2023/115 dated 17-01-2023 before it was read as, (d) change of status or constitution in relation to a portfolio manager (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 230 of the Companies Act, 2013 (18 of 2013) or the corresponding provision of any other law for the time being in force; and (B) any change in control over the body corporate; 9. 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 portfolio manager being a body corporate, shall be construed with reference to : (i) the definition of control in terms of Regulation 2(1)(e) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 as amended from time to time, if its shares are listed on any recognized stock exchange; (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, (A) an interest, whether direct or indirect, to the extent of at least fifty-one percent of voting rights in the body corporate; (B) right to appoint majority of the directors or to control the management directly or indirectly.