SEBI lifts ban on Barclays' issuing ODIs

Market regulator SEBI has withdrawn the ban on British bank Barclays for issuing offshore derivative instruments. With the move, the bank will be able to facilitate investment into the Indian stock markets by unregistered entities.

The regulator, had in December last year, banned Barclays Bank Plc from issuing overseas derivative instruments (ODI) following its failure to provide 'true and accurate picture of transactions' as required by the regulations.

"The deficiencies in the systems and processes of Barclays have now been remedied ... The ex-parte directions issued against Barclays Bank PLC vide the order dated December 9, 2009, shall stand revoked with immediate effect," SEBI said in a ruling.

Foreign Institutional Investors (FIIs) issue ODIs as investment vehicles to unregistered overseas investors to allow them to park their funds in Indian equities and derivatives.

According to the market regulator, the British bank has now taken steps to streamline its system.

"From submissions made by Barclays and the review reports of KPMG ... 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 order said.