Regulation 2 - Definitions - Securities and Exchange Board of India (Research Analysts) Regulations, 2014

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 and Exchange Board of India Act, 1992 (15 of 1992) ; (b) asset management company means a company as defined under clause(d) of Regulation 2 of Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 ; (c) associate means an associate as defined in Securities and Exchange Board of India (Intermediaries) Regulations, 2008 ; (d) Board means the Securities and Exchange Board of India established under section 3 of the Act; (e) certificate means a certificate of registration granted under these regulations; 1 [ (f) Change in control (i) 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) ; (ii) in a case other than that of a body corporate, shall be construed as any change in its legal formation or ownership or change in controlling interest. Explanation For the purpose of sub-clause (ii), the expression controlling interest means an interest, direct or indirect, to the extent of not less than fifty percent of voting rights or interest; ] 2 [ (fa) consideration means any form of economic benefit including non-cash benefit, received or receivable, directly or indirectly, in any form whether from client or otherwise for providing research services; (fb) family of an individual research analyst shall include individual research analyst, spouse, children and parents; (fc) family of client shall include individual client, dependent spouse, dependent children and dependent parents; ] (g) fund manager includes fund managers of a mutual fund or alternative investment fund or venture capital fund or portfolio manager; (h) independent research analyst means a person whose only business activity is research analysis or preparation and/or publication of research report; (i) inspecting authority means any one or more persons appointed by the Board to exercise powers conferred under regulation 27 ; (j) investment adviser means any person registered under Securities and Exchange Board of India (Investment Advisers) Regulations, 2013 ; (k) limited liability partnership means a partnership formed and registered under The Limited Liability Partnership Act, 2008(6 of 2009) ; (l) merchant banking or investment banking or brokerage services includes,- i. acting as an underwriter; ii. participating in a selling or an offering for the issuer or otherwise acting in furtherance of a public offer of the issuer; iii. acting as an adviser in a merger or acquisition; iv. providing or arranging venture capital or equity or debt; v. serving as placement agent for the issuer or otherwise acting in furtherance of a private offering of the issuer; vi. offering brokerage or market making services; (m) NBFC means a Non-Banking Financial Company registered by Reserve Bank of India; (n) NISM means the National Institute of Securities Market established by the Board; 3 [ (na) non-individual means a body corporate including a limited liability partnership and a partnership firm; (nb) other business activity or employment means such business activity or employment which is not related to securities and: a. it does not involve handling or managing of money or funds of client or person; or b. it is not related to providing advice or recommendation to any client or person in respect of any products or assets for investment purposes; (nc) partner means partner of the partnership firm or a limited liability partnership who renders research services on behalf of the firm or limited liability partnership; (nd) part-time research analyst means an individual or a partnership firm who for consideration, is engaged in the business of providing research services and is also engaged in any other business activity or employment; (ne) persons associated with research services shall mean any member, partner, officer, director or employee or any other staff of such research analyst or research entity including any person occupying a similar status or performing a similar function irrespective of the nature of association with the research analyst or research entity who is engaged in providing research services to the clients or other persons or group of persons or general public. Explanation . - All client and public facing persons such as analysts, sales staff, service relationship managers, client relationship managers, etc., by whatever name called, shall be deemed to be persons associated with research services, but shall not include persons who discharge clerical or office administrative functions where there is no connection with research services and they have no client contact; ] (o) price target means expectations of research analyst on the future performance of specific securities; 4 [ (oa) principal officer in case of non-individual research analyst engaged (i) solely in providing research services, shall mean the managing director or designated director or managing partner or executive chairman of the board or equivalent management body who is responsible for the overall function of the business and operations of non-individual research analyst; (ii) in activities other than research services through separate departments/divisions, may be the person at the management level who is a business head or unit head, responsible for the overall function of the business and operations related to research services: Provided that in case of non-individual research analyst being a partnership firm one of the partners shall be designated as its principal officer: Provided further that where no partner of firm registered as a research analyst has minimum qualification and certification requirements provided in these regulations, it shall apply for registration as a research analyst in the form of a limited liability partnership or a body corporate within such time as may be specified by the Board. Explanation. The provisions of sub clause (i) shall also be applicable to the principal officer of a non-individual entity registered both as a research analyst and an investment adviser but engaged in no other business activity. ] (p) proxy adviser means any person who provide advice, through any means, to institutional investor or shareholder of a company, in relation to exercise of their rights in the company including recommendations on public offer or voting recommendation on agenda items; (q) public appearance means any participation in a conference call, seminar, forum (including interactive and non-interactive electronic forum), radio or television or internet or web or print media broadcast, authoring a print media article or other public speaking activity in public media in which a research analyst makes a recommendation or offers an opinion, concerning securities or public offer: Provided that it does not include a password protected webcast, conference call or such other events with the clients, if all of the event participants previously received the research report or other documentation that contains the required applicable disclosures and that the research analyst appearing at the event corrects and updates during the public appearance any disclosures in the research report that are inaccurate, misleading or no longer applicable; (r) public media means any media source available to the general public and includes a radio, television, internet, web or print media; (s) public offer includes initial public offer, further public offer, offer for sale, disinvestment, takeover, buy-back or delisting of securities; (t) relative means a person as defined in sub section (77) of section 2 of the Companies Act, 2013 and who is financially dependent on independent research analyst 5 [ or part-time research analyst ] or individual research analyst employed by research entity; 6 [ (u) research analyst means a person who, for consideration, is engaged in the business of providing research services and includes a part-time research analyst; ] (v) research entity means an intermediary registered with Board who is also engaged in merchant banking or investment banking or brokerage services or underwriting services and issue research report or research analysis in its own name through the individuals employed by it as research analyst and includes any other intermediary engaged in issuance of research report or research analysis; (w) research report means any written or electronic communication that includes research analysis or research recommendation or an opinion concerning securities or public offer, providing a basis for investment decision and does not include the following communications:- (i) comments on general trends in the securities market; (ii) discussions on the broad-based indices; (iii) commentaries on economic, political or market conditions; (iv) periodic reports or other communications prepared for unit holders of mutual fund or alternative investment fund or clients of portfolio managers and investment advisers; (v) internal communications that are not given to current or prospective clients; (vi) communications that constitute offer documents or prospectus that are circulated as per regulations made by the Board; (vii) statistical summaries of financial data of the companies; (viii) technical analysis relating to the demand and supply in a sector or the index; (ix) any other communication which the Board may specify from time to time; 7 [ (wa) research services means the following services provided by research analyst: i. preparation or publication of the research report or content of the research report; or ii. providing or issuing research report or research analysis; or iii. making buy/sell/hold recommendation; or iv. giving price target or stop loss target; or v. offering an opinion concerning public offer, or vi. recommending model portfolio; or vii. providing trading calls; or viii. any other service of similar nature or character, with respect to securities that are listed or proposed to be listed in a stock exchange, whether or not any such person has the job title of research analyst to the clients or other persons or group of persons or general public; ] (x) securities means securities as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 ; (y) significant news or event means any news or event which is expected to have a material impact on, or that reflects a material change to, the subject company s earnings, operations or financial condition, other than unpublished price sensitive information, as specified in the internal policies and procedures of the research analyst or research entity; (z) subject company means the company whose securities are the subject of a research report or a public appearance; (za) stock exchange means a stock exchange recognised under section 4 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) ; (zb) third party research report means a research report produced by a person or entity other than the research analyst or research entity 8 [ ; ] 9 [ (zc) trading calls means intraday, ultra-short duration, non-delivery based (other than hedging) recommendation or any recommendation related to securities that are not personalized or investor specific. ] (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, 1956 and 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. ************** NOTES:- 1. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/115 dated 17-01-2023 before it was read as, (f) control means control as defined under the Companies Act, 2013; 2. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/220 dated 16-12-2024 3. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/220 dated 16-12-2024 4. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/220 dated 16-12-2024 5. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/220 dated 16-12-2024 6. Substituted vide Notification No. SEBI/LAD-NRO/GN/2024/220 dated 16-12-2024 before it was read as, (u) research analyst means a person who is primarily responsible for,- i. preparation or publication of the content of the research report; or ii. providing research report; or iii. making buy/sell/hold recommendation; or iv. giving price target; or v. offering an opinion concerning public offer, with respect to securities that are listed or to be listed in a stock exchange, whether or not any such person has the job title of research analyst and includes any other entities engaged in issuance of research report or research analysis. Explanation.-The term also includes any associated person who reports directly or indirectly to such a research analyst in connection with activities provided above; 7. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/220 dated 16-12-2024 8. Substituted vide Notification No. SEBI/LAD-NRO/GN/2024/220 dated 16-12-2024 before it was read as, . 9. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/220 dated 16-12-2024