Definitions

(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) “accredited investor” shall have the same meaning as assigned to it in regulation 2(1)(ab) of the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012; (c) “Alternative Investment Fund” shall have the same meaning as assigned to it in regulation 2(1)(b) of the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012; (d) “associate” in relation to a portfolio manager, means – i. a body corporate in which a director or partner of the portfolio manager holds, either individually or collectively, more than twenty percent of its paid–up equity share capital or partnership interest, as the case may be; or ii. a body corporate which holds, either individually or collectively, more than twenty percent of the paid–up equity share capital or partnership interest, as the case may be, of the portfolio manager; (e) “body corporate” shall have the meaning assigned to it under Section 2(11) of the Companies Act, 2013 (18 of 2013) as amended from time to time; (f) “certificate” means a certificate of registration issued by the Board; (g) “Change in control” in case of a body corporate – i. whose shares are listed on any recognised stock exchange, shall be construed with reference to the definition of control in terms of regulation 2(1)(e) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations, 2011; ii. whose shares are not listed on any recognised stock exchange, shall be construed with reference to the definition of control as provided in Section 2 (27) of the Companies Act, 2013 (18 of 2013); (h) “chartered accountant" means a chartered accountant as defined in section 2(1)(b) of the Chartered Accountants Act, 1949 (38 of 1949) and who has obtained a certificate of practice under section 6(1) of that Act; (i) “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); (j) “discretionary portfolio manager” means a portfolio manager who under a contract relating to portfolio management, exercises or may exercise, complete discretion as to the investment of funds and management of the portfolio of securities o f the client, as the case may be; (k) “eligible fund manager” shall have the same meaning as assigned to it in section 9(12) of the Income–tax Act, 2025 (30 of 2025); (l) “eligible investment fund” shall have the same meaning as assigned to it in section 9(12) of the Income–tax Act, 2025 (30 of 2025); (m) “goods” means the goods notified by the Central Government under section 2 (bc) of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and forming the underlying of any commodity derivative; (n) “Independent F und Manager” means a fund manager who manages the portfolio of clients in affiliation with a registered portfolio manager in accordance with the terms and conditions specified by the Board; (o) "inspecting authority" means one or more persons appointed by t he Board to exercise powers conferred under Chapter VII of these regulations; (p) “investee company” shall have the same meaning as assigned to it in regulation 2(1)(o) of the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012; (q) “investment agreement” means a legally binding contract between the client and the portfolio manager defining their relationship, setting out mutual rights, liabilities, obligations and authority relating to the management of portfolio and terms and conditions as may be mutually agreed between the parties, subject to the provisions of these regulations; (r) “investment approach” means a broad outlay of the type of securities and permissible instruments to be invested in by the portfolio manager for the client, taking into account factors specific to clients and securities; (s) “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; (t) “Manager” shall have the same meaning as assigned to it in regulation 2 (1)(q) of the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012; (u) “net worth" means the aggregate value of paid up equity capital, securities premium account and free reserves (excluding reserves created out of revaluation) reduced by the aggregate value of accumulated losses, deferred expenditure and miscellaneous expenditure not written off and any loans and advances given by Portfolio Manager including to their related parties or associates; (v) “NISM” means the National Institute of Securities Market established by the Board; (w) “Non– Discretionary Portfolio manager” means a portfolio manager who under a contract relating to portfolio management, manages the funds and portfolio of securities of the client in accordance with the direction of the client; (x) “portfolio” means the total holdings of securities and goods belonging to any person; (y) “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; (z) “Portfolio Management Service Route for Investment in Mutual Fund units (PRIM)” means an investment approach which fulfills the requirements under Chapter VI of these regulations; (aa) “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; (bb) "regulatory sandbox" means a live testing environment where new products, processes, services, business mo dels, etc. may be deployed on a limited set of eligible customers for a specified period of time, for furthering innovation in the securities market; (cc) “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 of the portfolio manager is a director and 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 th e 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– i. a holding, subsidiary or an associate company of the portfolio manager; or ii. a subsidiary of a holding company to which the portfolio manager is also a subsidiary; or iii. 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 – i. any person or entity forming a part of the prom oter or promoter group of the listed entity; or ii. any person or any entity, holding equity shares of ten per cent or more 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; (dd) “Scheduled Commercial Bank” means any bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934); (ee) “securities lending” means securities lending as per the Securities Lending Scheme, 1997 specified by the Board; (ff) “Sponsor” shall have the same meaning as assigned to it in regulation 2 (1)(w) 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, 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.