SEBI bans Barclays from issuing offshore derivatives
Mumbai: Market watchdog SEBI on Wednesday banned the
leading English bank Barclays from issuing offshore derivative
instruments following its failure to provide "true and
accurate picture of transactions" as required by the
"I hereby direct Barclays Bank Plc not to issue or
subscribe or otherwise transact in any fresh or new offshore
derivative instrument till such time as Barclays satisfies
SEBI that it has put adequate systems, processes and controls
in place to ensure true and correct reporting of its ODI
transactions to SEBI," said SEBI member KM Abraham in his
The offshore derivative instruments (ODIs) are investment
vehicles used by overseas investors to park funds in Indian
equities and derivatives.
Barclays would be required to furnish a certificate
from an auditor of international standing about its ability to
correctly report transactions, the order further said.
The bank has been given time till December 18 to submit
The SEBI issued the order after finding that "Barclays
has been non-compliant with the provisions of regulations and
is not capable of providing information. As a regulator,
therefore, SEBI cannot allow such an entity to continue with
any activity with regard to ODIs".
The case pertains to reporting of four ODIs issued by
Barclays way back in December 2006 with Reliance
Communications as underlying assets. Initially, Barclays in
its report to the SEBI had said that ODIs were issued to the
UBS AG. Later, the bank told the regulator that they were
issued to Hythe Securities and not UBS.
Taking exception to such reporting, the market watchdog
said the code of conduct "prohibits an FII to make any untrue
statement or suppress any material fact in any documents,
reports or information furnished to the SEBI."
FII regulations, it added, also cast responsibility on
the overseas institution to ensure that any downstream
issuance of ODIs is in strict compliance with the norms.
"It is evident that Barclays was aware that the ODIs
issued by it to Hythe Securities were onward issued to Pluri.
However, Barclays has continued to misrepresent to the
regulator that the ODIs were not issued back-to-back to any
other entity," the order said.
"This shows the blatant disregard by Barclays in
complying with the provisions of the FII regulations", the
SEBI said while issuing the order against the bank.
Barclays in a late night statement in Mumbai said it
will fully cooperate with SEBI during the process of examining
some of its derivative transactions .
"Barclays confirms that it has this evening received
notification from the SEBI of a show-cause notice". Since
receiving SEBI`s original email request of 24 September 2009,
we have been and will continue to co-operate fully with SEBI
as it examines certain offshore derivative transactions," the
More from India
More from World
More from Sports
More from Entertaiment
- One year of Modi govt: PM promises to fulfil aspirations
- Watch: Mumbai cops find new secret agents in housewives!
- Hundreds die as heat wave continues in India
- 2G scam: Ex-TRAI chief alleges Manmohan Singh had warned him to cooperate
- Pranab Mukherjee defends Bofors scam, says it was just a media trial
- Salman Khan attends sister Arpita's wedding reception in Mandi
- Zee Media's mega survey on Modi govt
- Zee Media Exclusive: Vidya Balan chats about 'Hamari Adhuri Kahani'
- Para athlete Deepa Malik complains of callous service by Air India
- Smriti Irani visits Amethi, promises to pay insurance money to 25,000 women
- I eat beef, can somebody stop me?: Kiren Rijiju hits back at Naqvi
- One year of Modi govt: Amit Shah addresses media
- Delhi: Visually impaired boy scores 91.4% in CBSE 12th Board exams
- MP: 14-year-old boy works as bonded labour since 2009
- BBV: What challenges lie ahead of Modi govt?
- One year of NDA govt: PM Modi writes open letter to nation, promises to transform India
- Arpita-Aayush wedding reception: Salman Khan spreads love in Mandi, says `hum aapke hain`
- World optimistic about India: PM Narendra Modi on 1 year of NDA govt
- MSBSHSE Class 12th HSC results 2015 to be declared at 1pm tomorrow
- Bharatiya Janata Party lacks majority for Ram Temple, Article 370: Amit Shah
- Rahul Gandhi takes a dig at one year of Modi govt, wishes 'happy birthday' to 'suit-boot ki sarkar'
- CBSE Class 10 Board Result 2015 (cbse.nic.in, cbseresults.nic.in) postponed?
- AAP govt moves resolution against MHA notification: As it happened
- Check mahresult.nic.in for MSBSHSE Maharashtra Class 12 HSC Result 2015
- CBSE Class 10 Board Result 2015 to be announced on May 28
- Maharashtra MSBSHSE HSC Result 2015 on mahresult.nic.in
- Heatwave kills 90 more in Andhra, Telangana; toll crosses 800
- Gujjars adamant on holding talks in Bayana; rail tracks remain blocked
- CBSE 10th result to be declared tomorrow
- I was misquoted, says Kiren Rijiju on 'beef' remark