Directions Under Sections 11(1), 11(4) And 11b Of The Securities And Exchange Board Of India Act, 1992, In Respect Of Barclays Bank Plc

For the Securities and Exchange Board of India: Mr. Jeevan Sonparote, General Manager Mr. Abhishek Khandelwal, Manager Ms. Chhavi Sinha, Legal Officer

1. The Securities and Exchange Board of India (hereinafter referred to as SEBI) had vide an Order dated December 9, 2009 (hereinafter referred to as the Order) directed Barclays Bank PLC (hereinafter referred to as Barclays), a foreign institutional investor (FII) registered with SEBI, not to issue/subscribe or otherwise transact in any fresh/new Offshore Derivative Instruments (hereinafter referred to as ODIs) till such time it satisfied SEBI that it has put adequate systems, processes and controls in place to ensure true and correct reporting of its ODI transactions. Barclays was also directed to furnish a certificate from an auditor of international standing in respect of the same. The Order was directed to be treated as a show cause notice and Barclays was advised to submit its reply on or before December 18, 2009 and to avail of an opportunity of personal hearing in the matter on December 23, 2009. Thereafter, on a request from Barclays, vide letter dated December 18, 2009, the time for filing the reply was extended to February 4, 2010 and the hearing was rescheduled to February 11, 2010. Subsequently, Barclays filed its reply vide letter dated February 5, 2010, forwarded through an electronic mail (e-mail). On February 11, 2010 (the date of hearing), Barclays was represented by Mr. Janak Dwarkadas, Senior Advocate, who made submissions on the same lines as in the aforesaid reply. Ms. Susan Chan and Ms. Raccel Hut from Barclays were also present during the hearing. The submissions and contentions of Barclays have been dealt with in the succeeding paragraphs in this Order.

2. I have considered the reply filed by Barclays, the oral submissions made by the learned senior counsel and other material available on record. Accordingly, the limited issue for consideration is to decide, after considering the submissions of Barclays, whether Barclays had contravened the statutory provisions as alleged in the Order. The Order has alleged that Barclays had failed to provide true, fair and complete details of the ODI activities undertaken by it and that it prima facie issued ODIs to an unregulated entity, in violation of the provisions of Regulations 20A and 15A(2) of the Securities and Exchange Board of India (Foreign Institutional Investors) Regulations, 1995 (hereinafter referred to as the FII Regulations).

3. Before proceeding further, the following facts are pertinent. On a perusal of the reports submitted by Barclays with respect to its ODI activity for the period between January 2006 and January 2008, it was observed that it had issued four ODIs (each dated December 15, 2006 with maturity upto May 4, 2011) to UBS AG with the securities of Reliance Communications Limited (RCL) as the underlying. Barclays had also reported that there were no back to back issuances of ODIs to any other entity. However, subsequent reports/information from Barclays indicated otherwise. From the same, it was found that the counterparty to the transactions was not UBS AG, as earlier reported by it, but was Hythe Securities Limited (Hythe). It was also found that the ODIs issued to Hythe were onward issued to Pluri Emerging Companies PCC Cell E Emerging Markets Growth Fund (hereinafter referred to as Pluri). Besides, there were fourteen other trades with the same counterparty which were not part of the periodical reports earlier filed by Barclays. The aforesaid acts of Barclays were found to be prima facie in violation of the provisions of the FII Regulations. Accordingly, the Order was passed, issuing certain directions, as mentioned in paragraph 1 above.

4. As regards the allegation that Barclays had incorrectly mentioned UBS AG as the counter party in its monthly reporting of ODI trades to SEBI, Barclays, vide reply dated February 5, 2010, stated that the same was only a technical breach and an inadvertent human error at the time of data entry. It was submitted that in 2008 and 2009, Barclays has improved its systems and the improved controls and processes are adequate to comply with the ODI reporting requirements. According to Barclays, the data relating to ODI transactions was fed automatically from the trading system to a data file. This data file was then processed by an access database, which shaped the data into a format for presentation to SEBI in accordance with the applicable regulations. A second source of information fed into the access database where it was matched with the trade data. This second feed comprised the client information for the relevant transactions. The client data was drawn from Barclays’ client database–known as Global Account Opening System (GAOS) where Barclays’ know-your-client information was recorded.

At that time, the linkages between the access database and GAOS was a mapping table in which a trade identification number and its corresponding counterparty identification were matched to the details of a client held in GAOS. In December 2006, the mapping table was populated manually. Once populated for a particular transaction, the mapping table was locked. In December 2006, a clerical error resulted in the matching of a trade identification number with the wrong counterparty and a consequential misreporting of the relevant transaction counterparty to SEBI. The person then responsible for preparing the mapping table copied and pasted the client data of UBS AG for the trade preceding the trade with Hythe in the list into the client fields for the Hythe trade. As the data in the mapping table is static, the error was not identified automatically and resulted in UBS being reported as the counterparty for the relevant ODIs in subsequent report. It was also submitted that its present system for producing ODI reports to SEBI is substantially more robust and far less susceptible to human error and that all data entered/manipulated by human operation is cross checked and reconciled to the original trade data to ensure consistency and accuracy of reporting.

In respect of the said allegation, the learned senior counsel has conceded that the reports should not have shown UBS AG, but submitted that the same was not deliberate or wilful. However, the aforesaid submissions would not justify the lapse by Barclays. Barclays should have had proper systems and processes in place for ODI reporting. FIIs serve as an important conduit through which foreign funds are allowed into the Indian securities market. It is for this very reason that it is essential that the FIIs are able to capture relevant details adequately and correctly report to SEBI the beneficiaries of all the instruments issued by them and the details thereof. Regulation 20A of the FII Regulations mandates that FIIs shall fully disclose information concerning the terms of and parties to the ODIs, entered into by it or its sub-accounts or affiliates relating to any securities listed or proposed to be listed in any stock exchange in India, as and when and in such form as the Board may require. By not providing the correct name of the party to whom ODIs were issued, Barclays has not complied with its duty as required in terms of the said Regulation.

With regard to allegation that Barclays had failed to make necessary reporting to SEBI as regards the fourteen ODI trades, Barclays in its reply had submitted that it had issued a single series of ODIs with RCL as the underlying and that no further ODIs were issued for each of these trades. Barclays also submitted that the trades reported by it were “creations /unwinds relating to the single series of ODIs”. In this regard, I note that the said allegation stems from the fact that the impugned trades were brought to the notice of SEBI by Barclays, vide submissions through e-mail made in response to SEBI queries dated September 24, 2009 and September 26, 2009. Barclays had itself vide e-mails dated September 25, 2009 and September 28, 2009, stated that there were other ODIs which were issued during the two year period (between January 2006 and January 2008) with RCL as the underlying scrip to the same counterparty for which SEBI was seeking information. The said fourteen trades were not part of the periodical filings made by Barclays. Given this uncertainty over completeness of information furnished to SEBI, Barclays was advised to furnish information on all ODIs issued to UBS AG as the counterparty for the period between November 2003 and October 2006. Barclays was also advised to provide documents evidencing the ODI issuances.

It was only in response to this request of SEBI, Barclays having gone back to the source documentation found that the counterparty was not UBS AG as reported by it to SEBI earlier but was Hythe.

5. As observed in the Order, SEBI places almost absolute faith and unqualified reliance on the ability of an FII to carry out the basic regulatory and prudential oversight. This oversight includes reporting all trades including ODIs as periodical returns as well as specific requests for information relating to its trading activity in India. Thus, the allegations relating to non-provision of the information relating to the fourteen trades were primarily based on the information provided by Barclays itself. Barclays now having clarified its position in respect of the trades, the said allegation is not pursued further. As per the scheme of the FII regulations, FII is required to provide all requisite information as sought by SEBI about its trading activity in India in terms of Regulation 20 of the FII Regulations. The said Regulation is reproduced below:

“Information to the Board 20. Every Foreign Institutional Investor shall, as and when required by the Board or the Reserve Bank of India, submit to the Board or the Reserve Bank of India, as the case may be, any information, record or documents in relation to his activities as a Foreign Institutional Investor as the Board or as the Reserve Bank of India may require.” By way of abundant precaution, and to leave nothing to interpretation, Regulation 20A was inserted in the FII Regulations during August 2003, which required FIIs to provide any or all information about the ODIs issued by it, as and when required by SEBI. A cursory reading of Regulations 20 and 20A of the FII Regulations would convey that an FII is obligated to provide “fully all information concerning the terms of and parties to ODIs”. When Regulations 15A permits FIIs to issue ODIs to the subscribers and also provided for onward issuance, albeit with restrictions, Regulations 20 and 20A requires information to be submitted as and when the Board may require. Barclays had contested that “although it is not required to under the FII regulations, Barclays had undertaken adequate measures to obtain information relating to the transferees of the relevant ODIs” The obligations that have been placed on an ODI issuer are two fold – issue ODIs and further issue or transfer in strict compliance with the FII Regulations, and report as per the formats provided for by SEBI.

The obligation to provide information about onward issuances is an inalienable part of the provisions under the FII Regulations that relate to issue of ODIs. This is very clear given the scheme of the FII Regulations and the duties expected of a FII as explained above. Thus, I am not able to appreciate the contention of Barclays that they were not obligated under the FII regulations to provide relevant information about onward transfers of the relevant ODIs. As regards the KYC compliance in respect of these ODIs, it is an undisputed fact that Barclays was not aware that the ODIs it had issued had been onward transferred to other entities. Thus, when it was not at all aware of the end beneficiaries (was not aware that the ODIs were transferred to Pluri as mentioned above), there can be no argument that Barclays had complied with the KYC requirements. In view of the same, I am not convinced by the submissions of Barclays in this regard and find it guilty of violating Regulation 20A of the FII Regulations.

6. As regards the allegation that Barclays (in column B of its monthly reports of ODI trades) had not disclosed that the ODIs were onward issued by Hythe, it was submitted that adequate measures were undertaken to ensure compliance with the reporting requirements by way of representations, warranties and undertakings by Hythe in the Barclays’ ODI documentation. According to Barclays, Hythe failed to notify Barclays of the downstream transfer of the relevant ODIs and had entered into transactions in respect of the relevant ODIs on a principal-to-principal basis and that Barclays did not have knowledge that Hythe had undertaken any downstream transfer of the relevant ODIs. Barclays has submitted that it had vide representation and warranties imposed on the subscriber (Hythe), an obligation to provide information about the onward/ downstream issuance of the ODI issued by it. Barclays have in their defence stated that contractual obligations were cast on the subscriber to inform it about the issuance and contended that non-reporting of Pluri in the monthly ODI reports to SEBI was not a breach by Barclays of the FII regulations which merited a prohibition order.

Barclays submitted that the Memorandum of Understanding (MoU) with Hythe contained an indemnity clause stating that the representations, warranties and covenants contained therein were being relied upon by Barclays and Hythe would indemnify Barclays against any breach of these representations and warranties. In this regard, I also note the submissions of the learned senior counsel that whatever was in its power was done under the contract with Hythe and that law cannot impose a burden which is beyond its capacity to do. However, I am unable to accept the submissions for the following reasons. The underlying principle of Regulation 15A(1) of the FII Regulations is that ODIs could only be issued directly or indirectly to persons who are regulated by an appropriate foreign regulatory authority and after complying with the “know your client” norms. It is reiterated that full and fair disclosure forms the foundation of the FII Regulations. The very objective of imposing such obligations on FIIs is because SEBI has no direct access to verify the entities who deal in the Indian Securities Market and the nature of funds that are being invested.

The said concern compelled SEBI to issue necessary amendments in Regulations 15A and 20A of the FII Regulations. SEBI, as a regulator of the securities market, places absolute reliance on the ability of an FII to carry out the functions as an FII and to comply with the basic regulatory norms put in place. When an FII fails to discharge its duties and does not exercise proper diligence, inflows through such FIIs could endanger the integrity of the securities market which may further lead to manipulation and fraud. This is the reason why SEBI has mandated FIIs to provide fair, true and correct information regarding their activity. The said information would be used by SEBI for the purposes of assessing, supervising and regulating their activity in the securities market. As already mentioned in the Order, when SEBI grants registration to an FII, it is presupposed that the said FII has the required systems and processes to ensure the integrity and accuracy of the data provided by it to SEBI under the applicable regulations and its capacity to exercise the necessary oversight. A duty is cast on the FII to ensure that no further issue or transfer of any ODI is made to any person other than a person regulated by an appropriate foreign regulatory authority.

It was the contention of Barclays that it was unaware that the ODIs issued to Hythe had been in turn further issued to Pluri. The failure of Barclays in providing true and correct reports of its ODI activity cannot be merely explained as a failure of the contractual obligations of Hythe towards Barclays. Barclays could have taken care to ensure that it received a positive confirmation from Hythe not only at the first issuance but also from time to time, through out the tenure of the instruments, to the effect that it was the end beneficiary of the ODIs issued to it or that it had passed on the ODIs to entities who are regulated by an appropriate foreign regulator. It was the defence of Barclays that the contractual obligations were cast on the subscriber to inform it about the issuance and contended that non-reporting of Pluri in the monthly ODI reports to SEBI was not a breach by it. If Barclays had enforced the contractual obligations of Hythe, it would have come to know about the further issuance of ODIs by Hythe. Thus, it has failed in its duty of ensuring that it has the knowledge of who the beneficiaries are.

As regards the allegation that Barclays, as a result of the onward issuance of ODIs to Pluri, had prima facie contravened Regulation 15(A)(2) of the FII regulations, it was submitted that Pluri, being registered and regulated by the Financial Services Commission, Mauritius and being managed by Opportunitie, S.A. (regulated by the Control of Autroite des marches Financiers), is also a person regulated by an appropriate foreign regulatory authority. However, Barclays cannot claim that it had done due diligence in the matter to ensure that end beneficiary was a regulated entity or the completion of the KYC requirements in respect of Pluri. Until November 19, 2009 (when SEBI asked information about the end beneficiary details of the referred ODIs), Barclays was clearly not aware by its own admission that Pluri was the end beneficiary of the ODIs issued by it. The compliance with Regulation 15A of the FII Regulations was purely by accident and not because of any active diligent role on its part.

7. During the course of hearing, the learned senior counsel submitted that as directed by SEBI in the Order to furnish a certificate from an auditor of international standing, Barclays had furnished a certificate from M/s KPMG, an independent auditor. It is the submission of the learned senior counsel that the review by KPMG and their report adequately answers the requirements of the Order. According to Barclays, KPMG conducted its verifications as per the internationally acceptable standards used for such examinations for the processes and controls of Barclays in accordance with the International Standards on Related Services 4400 “Engagements to Perform Agreed-Upon- Procedures Regarding Financial Information” issued by the International Auditing and Assurance Standards Board (IAASB). Barclays further submitted that KPMG has conducted an evaluation to provide the monthly ODI reporting to SEBI for the month of January 2010 and based on the evaluation exercise undertaken by KPMG, it had stated that there were no deficiencies identified in the KPMG Report dated February 5, 2010 (a copy of which was furnished). In the said Report, under the head “Limitations” and sub-head “General limitation” (page 2 of the Report), the following were mentioned:

“This review report is presented to Barclays on the understanding that the work performed by KPMG represents only a snapshot of the Process implementation and related internal controls as at the date of this report and does not represent the ongoing operation of the production environment……………….(emphasis supplied) Our observations on the Process and the related IT application controls and IT general controls are based on interviews with key personnel in Barclays and documentation presented to us by Barclays and specific tests that have been defined and documented within this report. ……….. The information contained herein has been prepared for Barclays for the purposes of reporting on the Barclays’ process for providing reporting to the SEBI………….”

8. The engagement letter of KPMG was limited only to cover the period between January 1, 2010 and January 31, 2010, for producing the report to SEBI. In the engagement letter, as regards data extraction, it was mentioned “through an evidential review of your application development process and appropriate testing of the process, inspect that the application has been built to the requirements documented in the technical design, ……. ” Further the engagement letter excluded the audit of “the factual accuracy of the GAOS system” and therefore, the Report had clearly mentioned that KPMG would not confirm the factual accuracy of the GAOS. From the above, it was quite evident that by Barclays’ own admission, the error in the reporting was because of data capture, whether manual or otherwise in the old system. However, given the scope of audit report mentioned above it can be observed that scope did not cover this aspect nor did it provide any comfort on the issue as to how the gap in data capture is being remedied and the data authenticated in the revised systems. The report from the auditor stated that if KPMG had performed additional procedures or performed an assurance engagement of the financial statements in accordance with International Standards on Auditing, International Standards on Review Engagements or International Standards on Assurance Engagements issued by the IAASB, other matters might have come to their attention that would have been reported.

The terms of engagement of KPMG by Barclays were not adequate and thus the certification of KPMG was not sufficient enough to convince SEBI that the systems of Barclays could be used for true and correct reporting of its ODI activities to SEBI. Therefore, during the hearing held on February 11, 2010, Barclays was informed that the aforementioned report of KPMG was not adequate to meet the requirements of the Order. Therefore, Barclays was advised to discuss the issues with SEBI and finalise the scope of the audit to be undertaken that would suitably address the issues which resulted in the errors in the first place, and submit a suitable certificate covering the aforesaid aspects and to the effect that the systems put in place by Barclays ensure the required standard of system integrity. Accordingly, the following aspects were framed with respect to the scope of the system audit and same were communicated to Barclays, vide letter dated February 19, 2010: a. The scope of the audit shall cover the issues mentioned in the Order dated December 9, 2009.

b. The audit should certify that Barclays, as a registered FII, has adequate systems to capture information about the identity of a beneficiary who acquires a Participatory Note (P Note) issued by it, and further that such systems also capture details of every beneficiary who purchases the P Note in any onward sale of such notes. c. The audit shall also certify that systems, processes and controls in place in Barclays for collection, processing, maintenance and report generation of ODI data are adequate for ensuring true and correct reporting of ODI data to SEBI.

9. Barclays was directed to submit a certificate covering the aforesaid terms within 45 days of the date of the letter. Barclays, vide letter dated March 23, 2010, submitted that the re-validation exercise would take approximately 20 weeks. It also reiterated its earlier submissions where it had requested for narrowing the scope of review from retrospective to prospective review of its ODI reports, as the retrospective review would result in significant workload and time for the completion of the review of entire ODI reports made till date. However, given that prospective review would only be a limited review of the processes for those instruments that would be issued by it and would not cover the ODIs already issued by Barclays till date, it was thought fit not to accept the suggestion and the same was communicated to Barclays. Thereafter, Barclays, stated that covering the entire trades during the period till date would be not only be a time consuming but also a resource intensive effort when most of the trades would either have expired or have redeemed and were not open positions. Considering the said request an audit coverage to the extent discussed above over the expired period would not only be too onerous, but also would be an exercise in futility for auditing expired trades, SEBI advised Barclays to undertake revalidation of all outstanding trades as at the end of September 2009 with the condition that these trades need to be validated and audited by the auditor without any qualifications. However, with respect to the expired trades, it was informed that irrespective of the audit certificate for all outstanding trades as on September 2009, SEBI would continue to have the right to seek true, correct and accurate information for the earlier period, if required in the future, to be audited and submitted to SEBI. Thus, if SEBI required any information about any of its previous trades, Barclays was bound to provide the same with audit validation as agreed for all its outstanding trades as on September 2009. Pursuant to the above, Barclays submitted the following vide letter dated June 4, 2010:

a. Engagement letter (dated April 23, 2010) from KPMG setting out the terms of reference for their work. b. An Independent Reasonable Assurance Report (dated June 3, 2010) submitted by KPMG to the directors of Barclays, in respect of the ODI report submitted by Barclays to SEBI from September 2009.

10. I have perused the aforesaid documents and inter alia noted the following: I. With respect to reconciliation, the following were mentioned in the engagement letter:

Reconciliation Confirm that the information in source documentation supports the information contained in the source systems and that this is an accurate reflections of the information included in the SEBI report specifically for:

Section A- Name and location of the person to whom the ODI are issued Section B- Name and location of other person in case back to back ODI has been issued against the instrument mentioned in A Section B1- Name and jurisdiction of the regulator by whom the person holding the ODI is regulated in terms of Regulation 15A of SEBI (FII)) Regulations 1995 Section C- Type of investor (e.g. hedge funds, corporate, individual, pension fund, trust, etc,) This information should be given for columns ‘B’ in case column information is ‘Nil’ furnish information for column ‘A’ Section D- Name of the ODI Section E- Nature of underlying securities (Equity/Debt/Derivatives) Section F- Name of the Indian Company (In case underlying is equity/Debt) Name of the derivatives in case underlying is derivative Section G- Issue date of ODI Section I- Maturity Date of ODI Section J- Face value of ODIs (according to business logic) Section K- Maturity value of ODIs (according to business logic)

II. From the Independent Reasonable Assurance Report dated June 3, 2010, submitted by Barclays, I note that a. The audit process involved independent evaluation of the report sections for each record in the SEBI Reports and performing procedures to confirm the accurate extraction from source systems within the Company. b. The various steps that were covered in the audit: i. Validation on the complete extraction of ODI trades from the source system. ii. Validation on the correct filtration of reportable ODI trades from the extraction of the source system.

iii. Validation on the accurate presentation of non-economic data in the SEBI report. iv. Validation on the accurate presentation of economic data in the Offshore Derivative Instruments. v. Validation on the accurate presentation of economic data in the Indian underlying. c. Most importantly, the validation process also included reconciliation with the term sheets for every trade and the regulatory status of the counterparties.

11. I also note that in the “Independent reasonable assurance report to the directors of Barclays Bank PLC”, the auditors were to report on whether or not, for the period between September 1, 2009 and September 30, 2009 (the review period), Barclays had accurately reported information relating to ODI outstanding positions within the monthly report in accordance with the format specified in terms of SEBI Circular dated April 2, 2004. The said document also mentioned that the work of the auditors was based upon examining the information included in the reports of Barclays submitted to SEBI and testing the accurate extraction of information that is provided by the source systems used by Barclays or any demonstrable evidence that supports its factual accuracy and to test that all outstanding positions of ODIs have been reported. KPMG, based on the procedures performed by them as to whether:

a. the reporting to SEBI is accurately extracted from Sophis, the trading platform, and GAOS, the main client management system of Barclays; and b. that all outstanding positions for ODIs have been identified and reported.

had concluded the assurance report by stating “……………..in our opinion and based on the work performed, the information provided in the SEBI reports during the review period is in all material respects, accurately extracted from the source systems of the company and accurately reflects all outstanding positions for ODI. Also enclosed with the auditors’ report dated June 03,.2010, was the outstanding positions of the ODIs as on September 2009.” (Emphasis supplied). The reviewer (KPMG) has thus certified that information provided in the reports of Barclays to SEBI during the review period is in all material respects, accurately extracted from the source systems of Barclays and accurately reflects all outstanding positions for ODI.

12. The Order has alleged that Barclays had violated Regulations 15A(2) and 20A of the FII Regulations, while issuing ODIs. On considering the submissions of Barclays, it is established that Barclays had violated Regulation 20A of the FII Regulations by not correctly disclosing the parties (to SEBI) to whom ODIs (where the securities of RCL were the underlying) were issued, for the relevant period in its periodical reports. As already said above, the compliance with Regulation 15A(2) of the FII Regulations has been achieved by accident and not because of any diligent effort by Barclays. From the submissions made by Barclays and the review reports of KPMG, as stated above in this Order, Barclays has undertaken steps to validate its systems and processes to ensure that true and correct reports of its ODI activity are furnished to SEBI. The Auditor, who has been appointed by Barclays pursuant to the Order, has in its final report certified that the information provided in the reports of Barclays to SEBI during the review period is accurately extracted from the source systems of Barclays in all material respects.

It also certified that the said reports accurately reflect all outstanding positions of the ODIs. The Order had directed Barclays, not to issue/subscribe or otherwise transact in any fresh/new ODIs, till such time it satisfied SEBI that it has put adequate systems, processes and controls in place to ensure true and correct reporting of its ODI transactions. Barclays was also directed to furnish a certificate from an auditor of international standing in respect of the same. The assurance report of KPMG dated June 3, 2010 has certified that adequate systems are in place for ensuring correct reporting by Barclays. I also note that Barclays as directed in the Order had not issued any ODIs from the date of the said Order till date. SEBI derives regulatory comfort from the work conducted by the auditor in general and the submission of auditor’s certificate in compliance with the Order, certifying that reasonable remedial measures have been taken. The deficiencies in the systems and processes of Barclays have now been remedied and a certificate to that effect has also been furnished to SEBI, in compliance with the Order.

As the situation has been remedied and the aforesaid directions in the Order have been complied with by Barclays, I am of the considered view that the ex-parte directions issued against it vide the Order need not continue and can be withdrawn.

13. In view of the foregoing, I, in exercise of powers conferred upon me under Section 19 of the Securities and Exchange Board of India Act, 1992 read with Sections 11(1), 11(4) and 11B thereof, hereby issue the following directions: a. The ex parte directions issued against Barclays Bank PLC vide the Order dated December 9, 2009 shall stand revoked with immediate effect. b. Barclays Bank PLC is advised that all Offshore Derivative Instruments issued by it should be strictly in compliance with the regulations that govern the said issuance.

14. With the above directions, the proceedings initiated under Sections 11(1), 11(4) and 11B of the Securities and Exchange Board of India Act, 1992, vide

Order dated December 9, 2009 against Barclays Bank PLC shall stand disposed of.

DR. K. M. ABRAHAM WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA

PLACE: MUMBAI DATE: AUGUST 30, 2010