Sebi bans Barclays from issuing offshore derivatives

Market watchdog Securities and Exchange Board of India (Sebi) today 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 regulations.

"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 order today.

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 its reply.

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".