Home Acts & Rules SEBI Regulation Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018 Chapters List Chapter I PRELIMINARY This
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Regulation 2 - Definitions - Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018Extract Definitions 2. (1) In these regulations, unless the context otherwise requires, the terms defined herein shall bear the meanings assigned to them below, and their cognate expressions shall be construed accordingly,- (a) Act means the Securities Contracts (Regulation) Act, 1956 (42 of 1956); (b) associate in relation to a person shall include another person: (i) who, directly or indirectly, by himself, or in combination with other persons, exercises control over the first person; (ii) who holds control of atleast twenty percent of the total voting power of the first person; (iii) who is a holding company or a subsidiary company of the first person (iv) who is a relative of the first person; (v) who is a member of a Hindu Undivided Family wherein the first person is also a member; (vi) such other cases where the Board is of the view that a person shall be considered as an associate based on the facts and factors including the extent of control, independence, conflict of interest; (c) Board means the Securities and Exchange Board of India established under the provisions of section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992); 2 [ clearing corporation means an entity that is established to undertake the activity of clearing and settlement of trades in securities or other instruments or products that are dealt with or traded on a recognized stock exchange and includes a clearing house and a limited purpose clearing corporation specified under Chapter IV-A. ] (e) clearing member means a person having clearing rights in any recognized clearing corporation and includes a clearing member as defined in clause (ae) of sub-regulation (1) of Regulation 2 of the Securities and Exchange Board of India (Stock Brokers and Sub- Brokers) Regulations, 1992 (f) company shall mean a company as defined in section 3 of the Companies Act, 2013; 1 [****] (h) control shall have the same meaning as assigned to it under clause (e) of sub- regulation (1) of regulation 2 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 or any modification thereof; 3 [ (ha) debt securities means corporate bonds, debentures or any other debt instruments as may be specified by the Board; ] 6 [ (hb) financial year means the period of twelve months commencing on the first day of April every year; ] (i) governing board means the board of directors of a recognised stock exchange or a recognised clearing corporation; 10 [ (j) key management personnel shall include: i. any person appointed as the managing director or executive director; or ii. a person serving as the head of a department or vertical and directly reporting to the managing director or to the directors on the governing board of the recognised stock exchange or recognised clearing corporation; or iii. a person serving as the head of a core function as specified under Part C of Schedule II of these regulations.; or iv. a person who stands higher in hierarchy to the head of any department(s) handling core function(s) in the recognised stock exchange or recognised clearing corporation; or v. reporting officials of key management personnel; or vi. any person defined as a key managerial personnel under the Companies Act, 2013; or vii. any other person who is a key decision making authority at the level of the recognised stock exchange or recognised clearing corporation or its direct or indirect material subsidiaries, as identified by the managing director or its Nomination and Remuneration Committee: Provided that in the case of a subsidiary of a recognised stock exchange or a recognised clearing corporation that is regulated by a financial sector regulator; the norms specified by such a regulator may be considered for determining as to whether the person at the subsidiary is designated as a key management personnel; ] 4 [ (ja) limited purpose clearing corporation means an entity that is established to undertake the activity of clearing and settlement of repo transactions; ] (k) netting means the determination by clearing corporation of net payment or delivery obligations of the clearing members of a recognised clearing corporation by setting off or adjustment of the inter- se obligations or claims arising out of buying and selling of securities, including the claims and obligations arising out of the determination by the clearing corporation or stock exchange, on the insolvency, winding-up, liquidation or resolution of any clearing member or trading member or client or such other circumstances as the clearing corporation may specify in its bye-laws, of the transactions admitted for settlement at a future date, so that only a net claim be demanded, or a net obligation be owed; 11 [ (ka) non-independent director means a director elected or nominated by the shareholders who are neither trading members nor clearing members, as the case may be, or their associates and agents; ] (l) novation means the act of one or more recognised clearing corporations interposing between the parties of every trade, so as to be a legal counterparty; (m) persons acting in concert in the context of acquisition or holding of shares or voting rights or control shall mutatis mutandis 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 (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 or any amendments thereof; (n) public includes any member or section of the public but does not include any trading member or clearing member or their associates and agents; (o) public interest director means an independent director representing the interests of investors in securities market and who is not having any association, directly or indirectly, which in the opinion of the Board, is in conflict with his role; 7 [ (oa) quarter means the period of three months commencing on the first day of April, July, October and January of each financial year; ] (p) recognised clearing corporation means a clearing corporation which is recognised by the Board under section 4 read with section 8A of the Act; (q) recognised stock exchange means a stock exchange which is recognized by the Board under section 4 of the Act. (r) regulatory department means a department of a recognised stock exchange or a recognised clearing corporation which is entrusted with regulatory powers and duties and includes such department as may be specified by the Board; 9 [ (ra) regulatory fee means fees levied by the Board under these regulations for carrying out the functions under the Act and the Securities and Exchange Board of India Act, 1992 (15 of 1992); ] 5 [ 8 [ (rb) ] repo means an instrument for borrowing by selling debt securities with an agreement to repurchase the debt securities on an agreed future date at an agreed price which includes interest on funds borrowed; 8 [ (rc) ] repo transaction means a transaction in repo and reverse repo in the debt securities that are dealt with or traded on a recognised stock exchange; 8 [ (rd) ] reverse repo means an instrument for lending by purchasing debt securities with an agreement to resell the debt securities on an agreed future date at an agreed price which includes interest on funds lent; ] (s) rules means the Securities Contracts (Regulations) Rules, 1957; 12 [ **** ] (u) trading member means a person having trading rights in any recognized stock exchange and includes a stock broker. (2) Words and expressions used and not defined in these regulations but defined in the Act, the Companies Act, 2013, the Securities and Exchange Board of India Act, 1992, the Depositories Act, 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. Omitted vide NOTIFICATION No. SEBI/LAD-NRO/GN/2019/21 dated 04-06-2019 w.e.f. 03-10-2018 before it was read as (g) commodity derivatives exchange means a recognized stock exchange which assists, regulates or controls the business of buying, selling or dealing in commodity derivatives and option in securities with the prior approval of the Board. 2. Substituted vide Notification No. SEBI/LAD-NRO/GN/2020/32 dated 08-10-2020 before it was read as (d) clearing corporation means an entity that is established to undertake the activity of clearing and settlement of trades in securities or other instruments or products that are dealt with or traded on a recognized stock exchange and includes a clearing house; 3. Inserted vide Notification No. SEBI/LAD-NRO/GN/2020/32 dated 08-10-2020 4. Inserted vide Notification No. SEBI/LAD-NRO/GN/2020/32 dated 08-10-2020 5. Inserted vide Notification No. SEBI/LAD-NRO/GN/2020/32 dated 08-10-2020 6. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/12 dated 23-03-2021 7. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/12 dated 23-03-2021 8. Re-Numbered vide Notification No. SEBI/LAD-NRO/GN/2021/12 dated 23-03-2021 before it was read as (ra), (rb), (rc) 9. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/12 dated 23-03-2021 10. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/124 dated 28-02-2023 (shall come into force on the one hundred and eightieth day from the date of their publication in the Official Gazette) before it was read as, (j) key management personnel includes a person serving as head of any department or in such senior executive position that stands higher in hierarchy to the head(s) of the department(s) in the recognised stock exchange or the recognised clearing corporation, or any person who directly reports to chief executive officer or to the director on the governing board of the recognised stock exchange or recognised clearing corporation, or any person upto two levels below the chief executive officer or managing director, or any other person as may be identified by its Nomination and Remuneration Committee; 11. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/124 dated 28-02-2023 (shall come into force on the one hundred and eightieth day from the date of their publication in the Official Gazette) 12. Omitted vide Notification No. SEBI/LAD-NRO/GN/2023/124 dated 28-02-2023 (shall come into force on the one hundred and eightieth day from the date of their publication in the Official Gazette) before it was read as, (t) shareholder director means a director who represents the interest of shareholders, and elected or nominated by such shareholders who are not trading members or clearing members, as the case may be, or their associates and agents;
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