Regulation 2(1) (l):
1 .Hedge fund (l) “Hedge fund”‖ means an Alternative Investment Fund which employs
diverse or complex trading strategies and invests and trades in securities having diverse risks or complex products including listed and unlisted derivatives. u/d SECURITIES AND EXCHANGE BOARD OF INDIA(ALTERNATIVE INVESTMENT FUNDS) REGULATIONS, 2012 Regulation 2 ( 1 ) (b) :
2. Alternative Investment Fund : Alternative Investment Fund‖ means any fund established or incorporated in India in the form of a trust or a company or a limited liability partnership or a body corporate which,(i)
is a privately pooled investment vehicle which collects funds from investors, whether Indian or foreign, for investing it in accordance with a defined investment policy for the benefit of its investors; and
(ii)
(ii) is not covered under the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999 or any other regulations of the Board to regulate fund management activities:
Provided that the following shall not be considered as Alternative Investment Fund for the purpose of these regulations,(i) family trusts set up for the benefit of ‗relatives‘ as defined under Companies Act, 1956; (ii) ESOP Trusts set up under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme), Guidelines, 1999 or as permitted under Companies Act, 1956; (iii) employee welfare trusts or gratuity trusts set up for the benefit of employees; (iv) holding companies‘ within the meaning of Section 4 of the Companies Act, 1956; (v) other special purpose vehicles not established by fund managers, including securitization trusts, regulated under a specific regulatory framework; (vi) funds managed by securitisation company or reconstruction company which is registered with the Reserve Bank of India under Section 3 of the
Securitisation
and
Reconstruction
of
Enforcement of Security Interest Act, 2002; and
Financial
Assets
and
(vii) any such pool of funds which is directly regulated by any other regulator in India.
3. Securities: U/d SECURITIES CONTRACTS (REGULATION) ACT, 1956 Regulation 2 (h) : (h) “securities” include— (i) shares, scrips, stocks, bonds, debentures, debenture stock or other marketable securities of a like nature in or of any incorporated company or other body corporate; 1
(ia) derivative.
(ib) units or any other instrument issued by any collective i nvestment scheme to the investors in such schemes;] (ic)security receipt as defined in clause (zg) of section 2 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2
2002,
(id) units or any other such instrument issued to the investors under any mutual fund scheme,
3
(ii) Government securities,
4
(iia) such other instruments as may be declared by the Central Government to be securities; and (iii) rights or interest in securities
1
Inserted by the Securities Laws (Amendment) Act, 1999 (w.e.f. 22-02-2000). Inserted by the Securitisation and Reconstruction of Financial Assets and Enforcement by Security Interest Act, 2002 (w.e.f. 21-06-2002). 3 Inserted by the Securities Laws (Amendment) Act, 2004 (w.e.f. 12-10-2004). 4 Substituted by Act 15 of 1992, (w.e.f. 30-01-1992). 2
4. Derivatives U/d SECURITIES CONTRACTS (REGULATION) ACT, 1956 Regulation 2 (ac) : 5
6
Regulation 2 (ac) “derivative” includes —
(A) a security derived from a debt instrument, share, loan, whether secured or unsecured, risk instrument or contract for differences or any other form of security. (B) a contract which derives its value from the prices, or index of prices, of underlying securities.
5. Listed & Unlisted Derivatives
5
Inserted by the Securities Laws (Amendment) Act, 1999 (w.e.f. 22-02-2000). Clause (aa) renumbered by the Securities Laws (Amendment) Act, 2004 (w.e.f. 12-102004). 6
6. U/D
SECURITIES AND EXCHANGE BOARD OF INDIA(ALTERNATIVE
INVESTMENT FUNDS) REGULATIONS, 2012
Regulation 3(4)(c): (c) Category III Alternative Investment Fund ‖ which employs diverse or complex trading strategies and may employ leverage including through investment in listed or unlisted derivatives.
Explanation. ─ ─ For the purpose of this clause, Alternative Investment Funds such as hedge funds or funds which trade with a view to make short term returns or such other funds which are open ended and for which no specific incentives or concessions are given by the government or any other Regulator shall be included.
7. Investment advice u/n SECURITIES AND EXCHANGE BOARD OF INDIA (INVESTMENT ADVISERS) REGULATIONS, 2013 Regulation 2(l): “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.
u/n regulation 2(m) : “investment
adviser ”
means
any
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.
u/n regulation 2(n):
“limited liability partnership” means a partnership formed and registered under The Limited Liability Partnership Act, 2008(6 of 2009).
