Regulation 3 - Definitions - International Financial Services Centres Authority (Capital Market Intermediaries) Regulations, 2025

3. Definitions (1) In these regulations, unless the context otherwise requires, the terms defined herein shall bear the meanings as assigned to them below, and their cognate expressions shall be construed accordingly, - (a) Act means the International Financial Services Centres Authority Act, 2019 (50 of 2019 ); (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 at least 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 is also a member; or (vi) such other cases where the Authority 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) Authority or IFSCA means the International Financial Services Centres Authority established under sub-section (1) of section 4 of the Act; (d) banker to an issue means a bank carrying out banking related activities in an issue; (e) Banking Unit shall have the same meaning as assigned to it under clause (c) of sub-regulation (1) of regulation 2 of the International Financial Services Centres Authority (Banking) Regulations, 2020; (f) body corporate shall have the meaning assigned to it under clause (11) of section 2 of the Companies Act, 2013 (18 of 2013) ; (g) broker dealer means a person which is in the business of buying and selling securities and other permitted financial products for its own account or on behalf of its customers and includes a trading member of a recognised stock exchange, and is registered as a broker dealer with the Authority under these regulations; (h) capital market intermediary (CMI) means an intermediary registered or authorised with the Authority under these regulations; (i) clearing member means a person having clearing and settlement rights in a recognised clearing corporation and is registered as a clearing member with the Authority under these regulations; (j) compliance officer means any senior officer, designated so and reporting to the board of directors or the governing body, as the case may be, who is capable of understanding the financial statements and the requirements for legal and regulatory compliances under these regulations and all applicable legal and regulatory requirements for the activities of the capital market intermediary in the IFSC, including compliance of policies, procedures, maintenance of records, risk management, and implementation of the applicable code of conduct specified in these regulations; (k) control shall include the right to appoint majority of the directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements or in any other manner, including by holding interest, whether direct or indirect, to the extent of more than fifty per cent. (50%) of voting rights or interest: Provided that a director or officer of an entity shall not be considered to be in control over such entity, merely by virtue of holding such position; (l) credit rating agency means a person which is primarily engaged in rating of securities, financial products, issuers or sovereigns; (m) custodial services , in relation to financial products, means safekeeping of such financial products and providing services incidental thereto, and includes: (i) maintaining accounts of such financial products; (ii) collecting the benefits or rights accruing to the client in respect of such financial products; (iii) keeping the client informed of the actions taken or to be taken by the issuer, having a bearing on the benefits or rights accruing to the client; (iv) maintaining and reconciling records of the services; and (v) undertaking activities relating to issuance of depository receipts in an IFSC; (n) custodian means a person who carries on or proposes to carry on the business of providing custodial services and is registered as a custodian with the Authority under these regulations; (o) debenture trustee means a trustee appointed in respect of any issue of debentures; (p) depository participant means a participant of a recognised depository and is registered as a depository participant with the Authority under these regulations; (q) distributor means a person who for a commission or fee engages with clients to facilitate investment or subscription into capital market products or capital market services ; (r) ESG Data Products includes products and services relating to ESG-related information provided by an ERDPP registered with the Authority; (s) ESG Ratings includes the broad spectrum of rating products relating to sustainable finance and include ESG scorings, ESG rankings, Sector ESG Ratings, and Thematic scores; (t) ESG Ratings and Data Products Provider (ERDPP) means an entity engaged in the activity (ies) of providing services relating to ESG Rating or ESG Data Product and is registered with the Authority under these regulations: Explanation: The services relating to independent external review for ESG labelled bonds listed on the recognised stock exchanges in an IFSC are included as permitted services by ERDPPs; (u) Foreign Jurisdiction means a country, other than India, whose securities market regulator is a signatory to International Organization of Securities Commission s Multilateral Memorandum of Understanding (Appendix A signatories) or a signatory to a bilateral Memorandum of Understanding with the Authority, and which is not identified in the public statement of Financial Action Task Force as: (i) a jurisdiction having a strategic Anti-Money Laundering or Combating the Financing of Terrorism deficiencies to which counter measures apply; or (ii) a jurisdiction that has not made sufficient progress in addressing the deficiencies or has not committed to an action plan developed with the Financial Action Task Force to address the deficiencies; (v) group entity means an entity of a business group that consists of a parent company or of any other type of legal person exercising control over the rest of the group, together with branches and/or subsidiaries; (w) inspecting authority means one or more persons appointed by the Authority to undertake inspection of the books, accounts, records and documents of a capital market intermediary under these regulations; (x) International Financial Services Centre (IFSC) shall have the same meaning as assigned to it under clause (g) of sub-section (1) of section 3 of the Act; (y) investment advice means advice relating to investing in, purchasing, selling or otherwise dealing in securities or investment products, and advice on investment portfolio containing securities or investment products, whether written, oral or through any other means of communication for the benefit of the client and shall include financial planning: Provided that investment advice given through newspaper, magazines, any electronic or broadcasting or telecommunications medium, which is widely available to the public shall not be considered as investment advice for the purpose of these regulations; (z) investment adviser means a person, who for consideration, is engaged in the business of providing investment advice to clients or other persons or group of persons and includes any person who holds out himself as an investment adviser, by whatever name called, and is registered with the Authority as an investment adviser under these regulations; (aa) investment banker means a person who is in the business of issue management either by making arrangements regarding selling, buying or subscribing to securities or acting as manager, consultant, adviser or rendering corporate advisory service in relation to such issue management, and is registered with the Authority as an investment banker under these regulations; (bb) key managerial personnel , in relation to a company incorporated in India, shall have the same meaning as assigned to it under clause (51) of section 2 of the Companies Act, 2013 , and in relation to a company incorporated outside India shall mean: (i) the chief executive officer or the managing director or the manager; (ii) the company secretary or the corporate secretary; (iii) a whole-time director; (iv) the chief financial officer; and (v) such other officer as may be designated as key managerial personnel by the Board of the company; (cc) net worth means the aggregate value of the paid-up share capital (or capital contribution) and all reserves created out of the profits, securities premium account and debit or credit balance of profit and loss account, after deducting the aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per the balance sheet, but does not include reserves created out of revaluation of assets, write-back of depreciation and amalgamation: Provided that where an entity is a broker dealer, clearing member or investment banker, the net worth shall mean the aggregate value of its liquid assets: Explanation: Liquid assets for the purpose of this clause shall mean cash and bank balance, fixed deposits, Government Securities and other instruments as may be specified by the Authority; (dd) principal officer means a designated employee of the capital market intermediary responsible for overall activities of the capital market intermediary; (ee) recognised clearing corporation means a clearing corporation recognised by the Authority; (ff) recognised depository means a depository recognised by the Authority; (gg) recognised stock exchange means a stock exchange recognised by the Authority; (hh) registered distributor means a distributor registered with the Authority under these regulations; (ii) registered credit rating agency means a credit rating agency registered with the Authority under these regulations; (jj) registered debenture trustee means a debenture trustee registered with the Authority under these regulations; (kk) research entity means a person registered as a research entity with the Authority under these regulations and who is responsible for publishing or providing research report with respect to securities and includes: (i) preparation or publication of the content of the research report; (ii) providing research report; (iii) making buy/sell/hold recommendation; (iv) giving price target; or (v) offering an opinion concerning public offer; (ll) 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 retail fund or non-retail 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 Authority; (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 Authority may specify from time to time; (mm) SEBI means the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 ; (nn) Single Window IT System (SWIT) refers to an online platform designed, inter-alia, to facilitate the processing of applications submitted by an applicant for obtaining Certificate of Registration under these regulations; (oo) sophisticated investor means and includes an accredited investor, or similar investor, by whatever name called, in its home jurisdiction. (2) Words and expressions used and not defined in these regulations but defined in the Act or Acts mentioned in the First Schedule to the Act, or 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 or any statutory modification or re-enactment thereto, as the case may be.