Regulation and ethics

216 terms · each links to a full explanation with a worked example and the exam traps

Access personUnder the US SEC's code-of-ethics rules, cited as a global best practice, a supervised person of an adviser who must report personal securities holdings and transactions, with pre-approval for IPOs.
AcquirerUnder the SEBI takeover code, any person who acquires — or agrees to acquire — shares, voting rights or control over a target company, alone, through another, or with persons acting in concert.
Adjudicating AuthorityThe quasi-judicial body constituted by the Central Government under Section 6 of the PMLA that issues notices, adjudicates attachments of property and confirms confiscations.
Adjudication proceedingsThe process SEBI initiates against a defaulting intermediary under the SEBI Act, 1992 — triggered by failures such as not furnishing information or returns, or not entering into a client agreement.
Administration and supervision bodySEBI-recognised body that administers and supervises Investment Advisers on SEBI's behalf, currently BSE Limited as the Investment Adviser Administration and Supervisory Body (IAASB).
Advice in publicly accessible mediaSEBI's code-of-conduct rule that a stockbroker or its employee giving investment advice about any security on TV, print or online media must first disclose their own, their family's and their employer's position in it.
Agency riskThe risk that a company's management, who control day-to-day decisions, pursue their own interests rather than those of the shareholders who actually own the business.
AGNIAMFI Guidelines & Norms for Intermediaries — the code of conduct for agents, brokers, distribution houses and banks selling mutual funds, enforced by warning and then cancellation of AMFI registration.
AIBIThe Association of Investment Bankers of India — the industry body for merchant bankers, recognised by SEBI as a self-regulatory organisation, founded in 1993 as the Association of Merchant Bankers of India.
AIPACSEBI's Alternative Investment Policy Advisory Committee, headed by Shri Narayan Murthy — its recommendations shape AIF valuation guidelines and proposals on Category III tax and GST.
AMFIThe Association of Mutual Funds in India — the association of all registered AMCs, which registers distributors through the ARN and sets codes of conduct, but is neither a regulator nor a self-regulatory organisation.
AMFI Code of EthicsAMFI's code of good practice for AMCs and trustees, drawn up to supplement the SEBI code of conduct in the Fourth Schedule and set more explicit standards, from integrity to enforcement.
APMIThe Association of Portfolio Managers in India — the PMS industry body that prescribes benchmarks and valuation norms, standardises client documents and registers PMS distributors.
Arm's length relationshipSEBI's requirement that an investment adviser keep its advisory business run separately from any other business it does, such as distribution, so advice is not coloured by another line of income.
Aspirational Districts ProgrammeA NITI Aayog scheme launched in 2018 that ranks 112 underperforming Indian districts monthly on health, education, agriculture, financial inclusion and infrastructure to speed up development.
AssociateFor a merchant banker: an entity linked to the issuer by 10% or more of voting rights, by control, or by a common director. An associate may not lead manage the issue, only market it.
Attachment of propertyA legal order preventing a person from dealing with property or bank accounts — up to 90 days by SEBI under Section 11(4) of the SEBI Act, up to 180 days under Section 5 of the PMLA, and a recovery mode under the SCRA.
Audit committeeThe board sub-committee responsible for reviewing a company's financial statements and nominating its auditors, which SEBI requires to be at least two-thirds independent directors.
Auditor independence testThe corporate-governance check that an auditor's total fees from a company or group stay below 10% of the auditor's overall income, so it is not financially dependent on that one client.
Auditor rotationThe corporate-governance rule that a company's statutory auditor must be changed at least once every five years, so a long-standing relationship cannot let facts stay hidden.
Authorised personTwo different entities share this name: under SEBI, an agent appointed by a stock broker to give clients access to the trading platform; under FEMA, a dealer authorised by RBI to deal in foreign exchange.
Automatic RouteThe path for a foreign investor to buy or redeem units of an Indian Category III AIF without prior approval from the RBI, DPIIT or government — the alternative being the Approval Route.
BankruptUnder the Insolvency and Bankruptcy Code, 2016, a debtor formally adjudged bankrupt by a bankruptcy order, a partner of a firm against which such an order has been made, or any person adjudged an undischarged insolvent.
Best ExecutionThe duty of a Category III AIF's Investment Manager to weigh the capability of the brokers it appoints, so that trades on behalf of investors are executed on the best available terms.
Best interest standardThe requirement, cited from Australian securities law as a global best practice, that an adviser take specific, defined steps to ensure advice given is genuinely in the client's best interests.
Bill of exchangeUnder the Negotiable Instruments Act, 1881, a written instrument with an unconditional order, signed by the maker, directing a person to pay a fixed sum to a specified person or the bearer.
Black box algoAn algorithmic trading strategy whose logic is not disclosed to, or replicable by, the user. Under SEBI's retail algo framework its provider must register as a Research Analyst.
Board for Financial SupervisionThe committee of RBI's Central Board, constituted in 1994, that directs RBI's consolidated supervision of commercial banks, financial institutions and NBFCs.
Body corporateAn entity with a legal existence separate from the persons forming it, as defined in Section 2(11) of the Companies Act, 2013. Only a body corporate can register with SEBI as a portfolio manager.
BRSR CoreThe tighter core of SEBI's BRSR format: 9 specified ESG key performance indicators that a listed company must disclose for its value chain in the annual report.
Business DayThe PFRDA-defined day on which the Trustee Bank's designated branch, the stock exchanges and the government securities market are all simultaneously open for business.
Business Responsibility and Sustainability ReportingSEBI's standardised, quantitative ESG disclosure format for India's top 1,000 listed companies by market capitalisation, mandatory from FY 2022-23, replacing the older Business Responsibility Report.
CDMRDSEBI's dedicated department for regulating the commodity derivatives segment, created after the 2015 merger with the erstwhile commodity regulator FMC and now folded into SEBI's Market Regulation Department.
CeFCoMThe Centralized Fee Collection Mechanism, managed by BSE Limited, an optional SEBI-recognised channel through which a client can pay an Investment Adviser's fee, instead of paying the adviser directly.
Certificate of registrationThe SEBI registration without which a depository cannot deal in securities, no entity may act as a DP, and no FPI may invest. It is valid unless SEBI suspends or cancels it.
Change of controlA change in who controls an AIF's sponsor or manager — majority board appointment or control of management for a company, or a 50% controlling interest otherwise — needing SEBI approval and an investor exit.
ChequeA bill of exchange drawn on a specified bank and payable on demand rather than at a future date, defined under Section 6 of the Negotiable Instruments Act, 1881, and including its electronic image and electronic form.
Chinese WallAn enforced separation inside a firm between departments holding confidential price-sensitive information and those dealing with clients, sales or public research.
Clash of personal and professional valuesAn ethical dilemma an adviser faces when their own personal beliefs conflict with what their employer or business incentives push them toward recommending to clients.
Client First principleThe ethical standard that an Investment Adviser must conduct business putting the client's interest above everything else, including their own self-interest, as the base of client trust.
Client level segregationThe SEBI rule that no single client may receive both advisory and distribution services from the same investment adviser group — each client is one or the other, never both.
Code of conductThe conduct obligations a broker accepts as a condition of registration — integrity, due skill and care, no manipulation, and a specific list of duties owed to the client and to other brokers.
Competing offerAn open offer made by another person within 15 working days of the first acquirer's detailed public statement, for at least as many shares as the first acquirer would end up holding.
Composition of offencesClosing a criminal case under the Depositories Act by agreement instead of a trial — available for any offence except one punishable with imprisonment only, or with imprisonment and also fine.
Conditional offerAn open offer made subject to a minimum level of acceptance — if that level is not reached, the acquirer buys nothing under the offer and the underlying agreement is rescinded.
Conflict of interestAny interest of the analyst's own — a shareholding, a fee, a relationship — that could bias the research, and which the regulations require to be disclosed rather than merely avoided.
Conflict of interest in distributionThe tension that arises when the same person both advises a client and earns commission from selling that client a product, since the highest-commission product may not be the one that suits the client.
Conflict of Interest PolicyThe written policy every AIF must have describing the conflicts that could arise at each level of the fund, how the manager will mitigate them, and how investors are told and asked to acknowledge them.
Connected personA person whose association with a company in the six months before the act put them, or could reasonably be expected to put them, in a position to access unpublished price sensitive information.
Cooling off periodThe 12 months after an investor-initiated change of distributor code in a folio, during which no trail is paid to either distributor; only afterwards may the AMC consider paying the new one.
Corporate governanceThe rules, processes and procedures followed in running a company, judged by an analyst against a checklist of board, audit and related-party tests rather than by reputation.
Dabba tradingIllegal off-exchange "trading" by unregistered operators who record deals against exchange prices in private books and settle only price differences in cash, with no delivery, guarantee or investor protection.
DARPAN portalNITI Aayog's online national database of NPOs; an NPO must register on it to be eligible for most forms of Indian government funding.
Deemed connected personsCategories of people the insider trading rules treat as connected automatically — relatives, group companies, trustees, bankers, auditors — unless the person proves the contrary.
Department of Economic AffairsThe Ministry of Finance department that formulates and monitors India's macroeconomic policy, including the functioning of the capital market and stock exchanges — the ministry-level authority behind SEBI's work.
Department of Financial ServicesThe Ministry of Finance department that administers government policy for public sector banks, term-lending institutions, life and general insurance, and pension reforms.
Derivative under SCRASCRA's own definition of a derivative — commodity derivatives, plus any instrument deriving value from an underlying security or index — which brings commodity futures within SEBI's jurisdiction as securities.
Designated authorityA SEBI officer not below the rank of Division Chief (or a bench of three) appointed under the Intermediaries Regulations to enquire into an intermediary's default and recommend action.
Digital divideThe OECD-defined gap between people, households, businesses and regions in their access to, and use of, information and communication technologies — a barrier social enterprises work to close.
Directorate of EnforcementThe multi-disciplinary agency that investigates the offence of money laundering and foreign exchange violations, enforcing the PMLA, FEMA, the Fugitive Economic Offenders Act and sponsoring COFEPOSA cases.
Downstream InvestmentAn investment by an Indian investment vehicle in a domestic company. For a Category III AIF it is indirect foreign investment only if its sponsor or manager is not Indian owned and controlled.
Due skill, care and diligenceA general standard in SEBI's broker code of conduct that covers gaps the specific rules miss, from delayed responses to unsuitable advice pushed on vulnerable clients.
Economic Offences WingThe wing of the CBI, created in 1964 and expanded into a full Economic Offences Division in 1994 after the 1992 securities scam, that investigates serious financial frauds including share price manipulation.
Eligible fund managerAn India-based, SEBI-registered fund manager meeting Section 9A conditions, who manages money for overseas "eligible investment funds" without making those funds taxable as Indian residents.
Eligible investment fundAn overseas fund that, together with its India-based eligible fund manager, meets Section 9A's conditions — so it is not treated as tax-resident in India merely because its fund management happens here.
Eligible promotersThe promoter categories SEBI requires before considering a credit rating agency application — PFIs, scheduled commercial banks, foreign banks, eligible foreign CRAs, or companies with Rs 100 crore net worth.
Ethical dilemmaA situation with two possible courses of action, neither clearly superior, where the choice an Investment Adviser makes reveals — and shapes clients' perception of — their ethical standards.
EthicsThe moral principles that decide and influence a person's behaviour — what is right or wrong beyond what the law requires — and the standard an Investment Adviser is expected to hold to the highest degree.
Evergreening of liabilitiesUsing AIF money to let an investee repay debts owed to the fund's manager, sponsor or their associates, or to hide a lender's stressed loans — prohibited, and a trigger for specific due diligence.
Execution only servicesA distribution model where the firm does not charge for advice and earns instead from commission on what it sells or executes, distinct from the fee-only advisory route an Investment Adviser must follow.
Ex-officio external memberAn external Investment Committee member who sits by virtue of an office — sponsor, sponsor group, investment manager group or investor in official capacity — so replacing them needs no investor consent.
Exonerating circumstancesThe circumstances listed in Regulation 4 of the PIT Regulations that an insider who traded while holding UPSI may demonstrate to rebut the presumption that the trade was motivated by that information.
Family of an individual investment adviserUnder SEBI's Investment Adviser Regulations, the individual adviser themselves, together with their spouse, children and parents — the group a compliance rule reaches when it says "family."
Family of clientUnder SEBI's Investment Adviser Regulations, a client's dependent spouse, dependent children and dependent parents — the group covered when an adviser's obligations to a client extend to that client's dependants.
FCRAThe Foreign Contribution (Regulation) Act, 2010 — administered by the Ministry of Home Affairs; an NPO must register under it before it can accept foreign donations.
FDI RouteThe route for strategic foreign investment into India: at least 10% of an investee company's post-investment fully diluted paid-up capital, under the DPIIT's FDI policy and RBI's NDI Rules.
FEDAIThe Foreign Exchange Dealers' Association of India — a self-regulatory body of banks dealing in foreign exchange, set up in 1958 and incorporated under Section 25 of the Companies Act, 1956.
Fee-only adviserAn investment adviser who earns income from fees paid by the client — not commissions from product providers — and typically does not execute the transactions advised.
FiduciariesProfessional firms — auditors, law firms, consultants, banks and similar — that assist or advise a listed company, and whom SEBI's insider trading rules therefore treat the same way as the company's own intermediaries.
FiduciaryA person who acts on behalf of another and is bound to put that other person's interest above their own — the standing SEBI regulation places every Investment Adviser in toward their clients.
Fiduciary capacityThe legal standing in which an investment adviser or portfolio manager must act — putting the client's interest ahead of its own and disclosing every conflict of interest as it arises.
Fifteen-day ruleThe SEBI rule barring an adviser from trading on their own account against advice just given to a client, for fifteen days — unless the client is told at least 24 hours before the adviser trades.
Financial Benchmark AdministratorThe regulatory category for a body that publishes a benchmark rate or index used in OTC interest rate derivatives — a floating rate in an IRD must come from an FBA or be a rate approved by FIMMDA.
Financial creditorUnder the Insolvency and Bankruptcy Code, a creditor who receives consideration against the time value of money — in other words, one who earns interest on the amount outstanding.
Fit and proper personThe character and record test in Schedule II of the SEBI (Intermediaries) Regulations, 2008 that an AIF's applicant, sponsor and manager must satisfy for registration and must keep satisfying afterwards.
Foreign Liabilities and Assets (FLA) ReturnThe annual RBI return a Category I or II AIF must file by 15 July each year if it has received or made foreign investment, filed through the FLAIR portal.
Foreign Portfolio InvestmentInvestment by a person resident outside India in an Indian company that stays under 10% of paid-up capital — above that, the same holding counts as Foreign Direct Investment instead.
For Profit Social EnterpriseA company or body corporate operating for profit (not a Section 8 company) that qualifies as a social enterprise, including the 67% test, and lists securities with an identifier marking it as such.
FPI RouteThe route for non-resident portfolio investment: not more than 10% of a listed Indian company's post-investment fully diluted paid-up capital, by investors registered with SEBI under the FPI Regulations, 2019.
FraudUnder SEBI PFUTP Regulations, 2003: any act, expression, omission or concealment committed to induce another person or his agent to deal in securities, whether or not anyone gains or avoids a loss.
Fraud under PFUTP RegulationsAny act, statement or hidden fact used to induce someone to deal in securities, as SEBI's 2003 fraud regulations define it — whether or not actual gain or loss results.
Front runningUsing non-public knowledge of a substantial impending order to trade ahead of it in the same or related securities or derivatives, expecting the price to move once the order becomes public.
FSDCThe Financial Stability and Development Council, set up in 2010 to replace the informal High Level Coordination Committee on Financial Markets, coordinating regulation among SEBI, RBI, DEA and MCA.
Full disclosure obligationThe fiduciary duty to give a client every relevant fact, with nothing omitted, especially wherever a conflict of interest exists or could even appear to exist.
Full trail modelSEBI's rule that AMCs pay distributors only trail commission in all schemes — no upfront commission and no upfronting of trail, in cash or kind, through sponsorships or any other route.
FVCI RouteThe route for SEBI-registered off-shore funds to make venture capital investments in eligible unlisted Indian companies — in stipulated priority sectors, or start-ups in any sector — at freely agreed prices.
Generally available informationInformation accessible to the public on a non-discriminatory basis — the opposite pole of unpublished price sensitive information, and expressly not including unverified media reports.
GIFT CityGujarat International Finance Tec-City — India's first International Financial Services Centre, established in 2015, offering Category III AIFs GST exemption and other tax benefits over onshore funds.
Governing councilA separate governing body every derivatives exchange or segment must have, on which broker- and clearing-members cannot hold more than 40% of the seats.
Guardian and WardThe Guardian and Wards Act, 1890, which protects a minor's person and property and empowers a court to appoint or remove a guardian — distinct from the operational role a guardian plays when investing for a minor.
High Value Debt Listed EntitiesA listed entity with over Rs 5,000 crore of outstanding listed non-convertible debt, made subject to equity-style governance norms — raised from an earlier Rs 1,000 crore threshold.
HLCCFMThe informal body that coordinated SEBI, RBI, the Department of Economic Affairs and the Ministry of Corporate Affairs before the Financial Stability and Development Council replaced it in 2010.
IFSCAThe unified regulator of India's International Financial Services Centre, established in April 2020, holding inside the IFSC the powers that RBI, SEBI, IRDAI and PFRDAI hold outside it.
Immediate relativeA spouse, plus any parent, sibling or child of the person or of the spouse who is either financially dependent on them or consults them on securities trading decisions.
Implementation servicesThe execution of an Investment Adviser's recommendations in the securities market, which the adviser may offer to a client but only through direct schemes and without charging any fee or commission for it.
InformantAn individual who voluntarily files a Voluntary Information Disclosure Form with SEBI about an alleged insider trading violation — protected from retaliation, and an informant whether or not any reward follows.
Information RepositoryAn SSE participant that enumerates, standardises and verifies information on NPOs, keeping a reliable electronic database so donors and investors can compare them; NGO DARPAN is India's public example.
Innovation SandboxA SEBI framework letting FinTech firms, start-ups and others not regulated by SEBI test their solutions offline, in isolation from the live market, overseen by exchanges, depositories and qualified RTAs.
In-principle ApprovalA SEBI approval granted to an eligible AIF applicant before its trust or partnership deed is registered — the deed must then be registered within 6 months, and no investor money may be called until registration.
In-principle registrationThe three-month transitional registration an individual Investment Adviser must apply for on crossing 300 clients or Rs 3 crore of annual fees, while converting to a non-individual adviser.
InsiderAnyone who is a connected person, or who simply possesses or has access to unpublished price sensitive information — possession alone is enough, with no relationship to the company required.
Insider informationMaterial non-public information which, if published, would immediately affect an investor's decision to buy or sell a security — information a research analyst must not collate.
Insider trading code of conductThe comprehensive code SEBI requires listed companies, intermediaries and fiduciaries to maintain under the PIT Regulations, 2015 — a compliance officer, insider disclosures and mandatory reporting of violations.
Institute of Social Auditors of IndiaThe first Self-Regulatory Organisation for Social Impact Assessors: a not-for-profit Section 8 company set up under the aegis of ICAI, with which assessors register before they may work on the SSE.
Integrated surveillance mechanismSEBI's combined system for tracking the activities of stock exchanges, brokers, depositories, R&T agents, custodians and clearing agents together, aimed at timely identification of fraudulent activity.
Integration of broking activitiesSEBI's September 2017 circular permitting equity broking and commodity derivatives broking under a single entity — the intermediary-level step that preceded single-exchange trading from 1 October 2018.
Interim resolution professionalThe professional the adjudicating authority appoints when an insolvency application against a company is admitted under the IBC, who takes over management and forms the committee of creditors.
Intermediary under the PFRDA ActThe PFRDA Act's defined class of regulated entities — pension funds, the CRA, the NPS Trust, advisers and points of presence — none of which may operate without a certificate of registration.
International Financial CentreA financial centre that serves customers outside its own jurisdiction — in India, GIFT IFSC, where the AML rules are written for a cross-border, cashless, foreign-currency business.
Intimation to SEBI modelThe PPM filing route for AI-only Funds and LVFs: filed directly with SEBI without a merchant banker or SEBI comments, so schemes can launch immediately on filing (a first scheme only once registered).
Investment adviserAny person who, for consideration, is in the business of giving investment advice, including anyone holding out as one — but not an AMFI-registered distributor whose advice is incidental to distribution.
Investment adviser depositThe deposit a SEBI-registered Investment Adviser must keep with a scheduled bank, marked as lien for a SEBI-recognised body, to pay dues from an arbitration or conciliation case against the adviser.
Investor Protection and Education FundThe fund SEBI administers under the SEBI Act, credited with profits disgorged after a banned contra trade and with monetary sanctions collected under a firm's own code of conduct.
IRDAIThe Insurance Regulatory and Development Authority of India, the regulator of India's insurance sector. It protects policyholders' interests and handles grievances on insurance contracts and ULIPs.
J. R. Varma CommitteeThe SEBI group under Prof J. R. Varma, set up in June 1998, that worked out risk containment for India's derivatives market — margining methodology, membership net worth, deposits and real-time position monitoring.
Know Your DistributorAMFI's verification process for mutual fund distributors — document verification plus a biometric impression of the right index finger, traditionally at a CAMS Point of Service — completed before ARN registration.
L. C. Gupta CommitteeThe 24-member SEBI committee under Dr. L. C. Gupta, set up in November 1996, that designed India's regulatory framework for derivatives and recommended they be declared securities.
Lender of last resortThe workbook's description of RBI's role as the lender commercial banks can turn to when no one else will lend them money.
Listing agreementThe agreement a company signs with a stock exchange fixing its ongoing disclosure duties — board-meeting notices, 15-minute intimation of price-sensitive proceedings, and minimum public shareholding.
Manager to the open offerThe SEBI-registered merchant banker, not an associate of the acquirer, appointed before the public announcement to run an open offer and answer to SEBI for its funding, disclosures and escrow.
Market Infrastructure InstitutionsThe institutions that form the plumbing of the securities market — stock exchanges, depositories and clearing corporations, and under SEBI's cyber framework also KRAs and QRTAs.
Material Change in Investment StrategyA change the Investment Manager makes to fund strategy that the Distributor must pass on to every investor, with its impact on risk and suitability — a distributor duty, not the PPM material-change regime.
Material financial relationshipA relationship where a person received payments such as loans or gifts from a designated person in the last 12 months worth at least 25% of that designated person's annual income, excluding arm's length deals.
Minimum public shareholdingThe minimum share of a listed company that must be held by the public — 25% under Rule 19A of the SCRR, a continuous listing requirement rather than a condition met only at listing.
Ministry of Corporate AffairsThe Government of India ministry that administers the Companies Act and the Competition Act, supervises ICAI, ICSI and the Institute of Cost Accountants, and has the ROCs and the SFIO under it.
Mis-sellingSelling securities or securities services by knowingly making a false statement, hiding material facts or risk, or not taking reasonable care that the product suits the buyer — an unfair trade practice.
Model Code of ConductA 21-point conduct code every Category III AIF distributor must follow, covering disclosure, suitability, confidentiality and fair dealing — read alongside SEBI's own AIF Code of Conduct.
National Company Law TribunalThe quasi-judicial authority constituted under section 408 of the Companies Act, 2013 from 1 June 2016 to decide civil corporate disputes under the Companies Act and the Insolvency and Bankruptcy Code.
NGRBCNational Guidelines on Responsible Business Conduct — nine MCA principles for businesses of every kind, the basis for BRSR reporting by the top 1,000 companies; criticised as not legally enforceable.
Nomination committeeThe board committee that appoints independent directors, which the workbook says should ideally consist exclusively of independent directors so that company executives have no role in the appointment.
Non-executive directorA board director who is not part of day-to-day management, but who is also not classed as independent — a third category sitting between executive and independent directors.
Not for Profit OrganisationA social enterprise that is a charitable trust, charitable society or Section 8 company (or other entity SEBI specifies); it can register on an SSE and raise money mainly through ZCZP instruments.
Offer periodUnder the SAST Regulations, the period from the agreement or public announcement that triggers an open offer until consideration is paid to accepting shareholders, or the offer is withdrawn.
Overseas advisory feesThe dollar-denominated ceilings a retirement adviser may charge a prospect outside India — up to US$ 8 for on-boarding to a PoP in India, US$ 2 through an overseas PoP branch, and US$ 1 per later transaction.
Pari-passu rightsThe rule that differential rights offered to select AIF investors must not harm others: no liability to other investors, no control, no change to others' rights, and full disclosure in the PPM.
PaRRVAThe Past Risk and Return Verification Agency recognised under the SEBI (Intermediaries) Regulations, 2008 to verify risk and return metrics claimed by investment advisers, research analysts and algo providers.
Part-time investment adviserAn individual or firm registered with SEBI to give investment advice for consideration while also carrying on another business activity or employment — capped at 75 clients in total.
Person of Indian OriginA citizen of a country other than Bangladesh, Pakistan, Afghanistan, China, Iran, Bhutan, Sri Lanka and Nepal who once held an Indian passport or whose parent, grandparent or great-grandparent was an Indian citizen.
Person resident in IndiaFEMA's definition of residence under section 2(v) — broadly a person normally residing in India for more than 182 days in the preceding financial year, plus Indian-registered bodies and certain offices.
Persons acting in concertPersons who, with a common objective of acquiring shares, voting rights or control of a target company, co-operate under a formal or informal agreement — plus categories the SAST Regulations deem to act in concert.
Persons associated with investment adviceAny member, partner, officer, director, employee or sales staff of an investment adviser who is engaged in providing investment advisory services to the adviser's clients.
PFRDAThe Pension Fund Regulatory and Development Authority — interim NPS regulator from 2003 and statutory authority for the pension sector since 1 February 2014 under the PFRDA Act, 2013.
PFUTP RegulationsSEBI's 2003 regulations banning fraudulent, unfair and manipulative trade practices in the securities market, including a specific list of dealings deemed fraudulent regardless of actual gain or loss.
Pledging of sharesPromoters using their shareholding as collateral to raise a loan instead of selling it — legitimate on its own, but a governance risk analysts must size up when the pledged amount is high.
Portfolio Investment SchemeThe FEMA route through which SEBI-registered FPIs, and NRIs permitted by a designated AD Category-I bank branch, buy shares, convertible debentures and warrants of listed Indian companies within set limits.
Pre-clearancePrior approval from the compliance officer before a designated person trades above a board-set threshold. A pre-cleared trade must be executed within at most seven trading days.
Predominance testThe FPSE-only eligibility test: at least 67% of activities must serve the target population, shown by revenue, expenditure or customer base averaged over the preceding 3 years.
Primacy of social intentThe ICDR condition every social enterprise must establish before using an SSE: an eligible social activity, an underserved target population and, for an FPSE, at least 67% of activities qualifying.
Principal officerThe named individual at a non-individual intermediary who carries personal regulatory responsibility for the advisory business, and who must personally hold the prescribed qualification and NISM certification.
Principles for Responsible InvestmentA United Nations-backed global network of investors, launched in 2006, that promotes integrating environmental, social and governance factors into investment decisions as part of fulfilling fiduciary duty.
Private placement memorandumThe offer document of a Category III AIF, filed with SEBI through a merchant banker at least 30 days before a scheme launches — and the document SEBI comments on but never approves.
Promissory noteA written, unconditional undertaking signed by its maker to pay a certain sum of money to a named person, to that person's order, or to the bearer — defined by Section 4 of the Negotiable Instruments Act, 1881.
Proxy adviserA person who advises institutional investors or shareholders on exercising their rights in a company, including voting recommendations on agenda items and recommendations on public offers.
Qualified Stock BrokerA stock broker designated each year by SEBI or the exchanges, because of its size and potential impact on investors, that must meet enhanced governance, risk, technology and investor-service obligations.
RBI hedging directiveRBI's instruction to banks to advise borrower clients to hedge their commodity price exposure, wherever a loan is secured against commodities as collateral.
RBI-SEBI Standing Technical CommitteeThe joint committee constituted after an RBI-SEBI meeting on 28 February 2008 to coordinate the regulators on exchange-traded currency and interest rate futures; its May 2008 report launched currency futures.
Reasonable or objective basisThe fiduciary obligation that an adviser's recommendation must rest on grounds that are defensible on the client's facts, and not on factors that benefit the adviser.
Registered Investment AdviserA SEBI-licensed professional who charges investors a fee for investment advice; since 2013 only an RIA may use the word "adviser" — distributors, brokers and insurance agents may not.
Registrar of CompaniesThe office, appointed by the Central Government under section 396 of the Companies Act, 2013, that registers companies, keeps their public records and charges, and polices their statutory filings.
Regulatory sandboxA SEBI framework letting registered market participants live-test FinTech innovations with a limited set of customers, for a limited period, under the regulator's supervision.
Related party transactionA deal between a company and a party connected to its controllers — promoters, their relatives, group firms. Watched because it can enrich the promoter group at minority shareholders' cost.
Remuneration committeeThe board committee that decides the pay of directors and senior management, which SEBI requires to be made up entirely of non-executive directors with an independent director as chairman.
Research AnalystUnder the SEBI (Research Analysts) Regulations, 2014, a person who, for consideration, is engaged in the business of providing research services — including a part-time research analyst.
Research entityA registered intermediary — such as a stock broker or merchant banker — that issues research reports or opinions on securities to influence investment decisions, requiring SEBI registration under the RA Regulations.
Research Objectivity StandardsThe CFA Institute's specific, measurable norms for managing and disclosing the conflicts of interest that can stop a research analyst producing independent research and objective recommendations.
Reserve Bank of IndiaIndia's central bank, set up on April 1, 1935 under the RBI Act. It runs monetary policy, regulates and supervises banks and NBFCs, is banker to the Government and lender of last resort.
Section 8 companyA company incorporated under Section 8 of the Companies Act, 2013 to promote charitable objects, applying its profits only to those objects — one of three legal forms, alongside a Trust and a Society, an NPO can take.
Securities and Exchange Board of IndiaThe statutory regulator of India's securities market, set up under the SEBI Act, 1992, to protect investors and to develop and regulate the market. It registers brokers, DPs and mutual funds.
Securities Appellate TribunalThe statutory tribunal established under the SEBI Act that hears appeals from orders of SEBI and of its adjudicating officers, which must be filed within 45 days of receipt of the order.
Self-dealingUsing your position inside a fund house to transact with the fund itself on terms that benefit you unfairly, at the expense of the scheme and its unit holders — banned outright by the AMFI Code of Ethics.
Self-Regulatory OrganisationThe body every Social Impact Assessor must be registered and empanelled with: ISAI under ICAI, or another agency SEBI specifies (ICMAI SAO, ICSI ISA). It issues the code of conduct assessors follow.
Serious Fraud Investigation OfficeThe multi-disciplinary investigation agency under the Ministry of Corporate Affairs that investigates complex corporate frauds assigned by the Central Government under section 212 of the Companies Act, 2013.
Sham transactionsTrades entered into without intending to perform them or to change ownership of the security — deemed a manipulative, fraudulent or unfair trade practice under regulation 4(2) of the PFUTP Regulations.
ShramdaanIndia's tradition of voluntary community labour, cited by the workbook as the root of the country's civil-society ethos since Independence — the cultural precursor to today's regulated social sector.
Significant Unit holderUnder the AMFI Code of Ethics, any entity holding 5 per cent or more of a scheme's total corpus, counting everything it controls — so its dealings with the scheme must be justified to the trustees.
Social capitalThe OECD and World Bank concept of networks, shared norms and trust that let people cooperate — one of four things the workbook says every social enterprise builds through its social intent.
Social enterpriseAn organisation, non-profit or for-profit, that exists primarily to create social impact; under SEBI ICDR it is either an NPO or a For Profit Social Enterprise that has established primacy of social intent.
Social Stock Exchange Governing CouncilThe council every Social Stock Exchange must set up to oversee its functioning, with balanced stakeholder representation and guidance on registration, fund raising and disclosures by social enterprises.
Social VentureA trust, society, company, venture capital undertaking or LLP formed to promote social welfare, solve social problems or provide social benefits — the class of entity a Social Impact Fund invests in.
Soft Dollar ArrangementAn arrangement in which a Category III AIF uses clients' money, typically through brokerage, to pay for third-party or proprietary research — a conflict of interest that must be disclosed.
Special escrow accountThe account an acquirer opens with a SEBI-registered banker to an issue to hold the cash consideration payable to shareholders who tendered in an open offer, operated by the manager to the open offer.
Standard Operating Procedure (SOP) on defaultSEBI's laid-down sequence of actions for exchanges, clearing corporations and depositories on warning signs of a member default, including settling small investors' credit balances under Rs 25 lakh first.
Standard Setting Forum for AIFsA pilot industry body — the SFA — that formulates implementation standards for Category III AIFs in consultation with SEBI, including the standard PPM audit reporting format and the demat-holding rules for AIF units.
Standard warningThe mandatory 14-word disclaimer in every mutual fund advertisement — "Mutual Fund investments are subject to market risks, read all scheme related documents carefully." — with no words added or removed.
Stewardship codeSEBI's mandatory code requiring all AIFs and mutual funds to monitor, engage with and vote in the listed companies they invest in — and to publish the policies by which they do it.
Stock exchange bye-lawsThe rules each stock exchange frames for its own trading members — admission, listing, fees, trading and settlement, members' rights, arbitration — approved by SEBI and consistent with the SCRA, SCRR and SEBI Act.
Structured digital databaseThe tamper-evident internal register every handler of unpublished price sensitive information must maintain, recording the nature of the information and the PAN of everyone who shared it and received it.
SWAGAT-FISingle Window Automatic and Generalised Access for Trusted Foreign Investor: government and government-related investors and public retail funds, freed from the FPI aggregate 50% NRI/OCI/RI limit.
TakeoverThe acquisition of substantial shares or voting rights in a company for the purpose of seeking management control — regulated for listed companies by the SEBI (SAST) Regulations, 2011.
Target populationUnder ICDR Regulation 292E, the underserved or less privileged population segments, or lagging regions, that a social enterprise must serve to establish primacy of social intent.
Third Schedule Code of ConductThe 9-head code of conduct in the Third Schedule to the SEBI (Investment Advisers) Regulations, 2013, which every Investment Adviser must follow at all times.
Three-tier regulatory frameworkThe layered structure of commodity market regulation in India — Government of India, SEBI, and the Exchanges — each with a distinct role, as against a two-tier or single-regulator structure.
Tippee liabilityLiability of a person who trades on a tip about confidential information, such as an impending large order — requiring proof that the tipper owed confidentiality, the tippee knew of the breach, and traded anyway.
Trading callsIntraday, ultra-short and non-personalised buy/sell recommendations — defined so precisely that SEBI's rules say they do not count as investment advice at all.
Trading plans — regulation 5A pre-announced, irrevocable schedule of trades an insider files with the compliance officer, which may not begin for 120 calendar days and then executes without pre-clearance or trading window limits.
Uberrimae fideiThe Latin principle of utmost good faith — that a person acting on another's behalf must make no profit at that person's cost and must never take unfair advantage of their trust.
Unified RegistrationThe single SEBI certificate, under the RTA Regulations, 2025, that lets one entity act both as Registrar to an Issue and as Share Transfer Agent — replacing the old category-wise registration.
Union List and State ListThe Constitutional division, under Schedule VII, that places securities regulation under the Centre's Union List while spot-market trade in agricultural commodities falls under the states' State List.
Unit-linked insurance policy exclusionThe carve-out in the SCRA definition of "securities" that leaves out a unit-linked insurance policy, even though it looks like a mutual fund unit on the surface.
Unpublished price sensitive informationInformation about a company or its securities that is not generally available and that would, on becoming available, be likely to materially affect the price of the security.
Volcker RuleThe limb of the US Dodd-Frank Act of 2010 that segregates banking from proprietary trading and asset management — the workbook's example of investment banks being re-regulated after 2008.
Voluntary offerAn open offer that an acquirer already holding 25% or more (but below the maximum permissible non-public shareholding) chooses to make to consolidate its stake, without any trigger forcing it.
Warehousing of investmentsParking securities for a period so they can be transferred or disposed of later — a conflict of interest the PPM must disclose, and not the same thing as warehousing of deals.
WDRAThe statutory authority under the Warehousing (Development and Regulation) Act, 2007, that registers and regulates warehouses used for storing agricultural commodities and their electronic negotiable warehouse receipts.
Working daysFor AIF filings and reporting, all days excluding Saturdays, Sundays and public holidays on which the concerned SEBI office is closed for business, as published on SEBI's website.
Wraps and platformsTechnology platforms offering standardised model portfolios that investors or their advisers can execute directly, sharing a fee between the platform and the adviser who uses it.