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24. The impugned order further said that Regulation 20 of FII Regulations was of much wider scope which casts an obligation on the FII to submit to the Board / RBI "any information, record or documents in relation to his activities as a Foreign Institutional Investor".

25. In the light of aforesaid, the information sought by SEBI was well within the realm of Regulations 20/20A and UBS was obliged to supply the same under the FII Regulations.

26. Investigations were hampered by contumacious conduct of UBS: The show cause notice alleged that the investigations were hampered because of the contumacious conduct of UBS. SEBI wanted to conduct an investigation about the reasons of an unprecedented market crash on 17th May, 2005 since UBS was one of the major market participants on that day in both cash and derivative segment (F&O). SEBI asked UBS along with other information to give the names of major shareholders and names of top five investors in respect of major clients of UBS. It had also sought the confirmation from UBS that none of the major investors of its clients are Indian nationals, persons of Indian origin or overseas corporate bodies which are majority owned or controlled by NRI. The information was given belatedly on persistent follow up and in respect of Caxton International Limited, the largest client of UBS, the required information was not given till 17th May, 2005 i.e., the date of the impugned order. Despite vigorous follow up by SEBI and UBS, Caxton International did not furnish information regarding their major shareholders/investors, etc. SEBI again reminded UBS to obtain the said clients' names and addresses of their top five shareholders / investors. In view of non receipt of information SEBI wrote to Securities Exchange Commission, USA and in January, 2005, SEC, furnished the requisite information to SEBI including the client agreement entered into by UBS AG and Caxton International Limited. SEBI had asked UBS to supply copies of KYC and client agreements with Caxton International Limited, Discovery Capital and Indea Capital Limited. UBS wrote on 13/05/2005 that they had already sent the Know Your Client procedure and the agreement with three clients which were understood by them as business terms and conditions of UBS AG London, branch and not the ISDA agreements. It was strange that UBS did not understand the requirement of ISDA agreement and sent only terms and conditions. It is mentioned in the impugned order that all this hampered conducting investigation leading to valuable loss of time for conducting a meaningful investigation. SEBI could get the copy of the agreement between UBS AG and Caxton International Limited through Securities Exchange Commission (SEC), USA during January, 2005 and it could get client agreement between UBS AG and Discover global Opportunity Master Fund Limited and Indea Absolute Return Fund only on April 29, 2005. Therefore it could not conduct a meaningful investigation in real time. UBS, therefore, according to SEBI, did not give the information timely and it virtually thwarted the investigation. If UBS had any doubt about the information, it could have sought clarification from SEBI regarding actual requirement of SEBI. The impugned order says "The conduct of UBS as narrated above speaks for itself and for the purpose of determining the Contumacious Conduct of UBS, I do not find it necessary to go into the notices of UBS for not-cooperating to the requests of the regulator. The egregious conduct of UBS is evident from the circumstances as mentioned above."

48. As regards non receipt of ISDA agreement, it was submitted by the learned senior counsel that on 11/01/2005 the respondent had received from SEC, New York, a copy of the ISDA agreement entered into between Caxton International Limited and UBS AG, London. During personal hearing on 1st February, 2005 the learned Whole Time member had made a request to provide him with the copy of agreement governing the relationship between the respective clients and UBS AG, London. The appellant thinking that the information sought by the Whole Time Member was the terms and condition had sent the "business terms and conditions" under the cover of a letter dated 24th February, 2005 to the respondent. It was also made clear in the covering letter of 24th February, 2005 that the document being sent to the respondent was in response to his request during the personal hearing on 1st February, 2005 for terms and conditions of business of UBS. Then again on 14/03/2005 the appellant wrote a letter to the respondent stating that it had provided all the information requested at the personal hearing but there was no response from SEBI. It was only on 20/04/2005 that the respondent alleged that the relevant agreement which was requested by him in personal hearing were not "terms and conditions of business" of UBS but were of ISDA agreement. There was a personal meeting with the respondent on 29th April, 2005 to seek clarification and after that on the same day the appellant provided the ISDA and related agreement between UBS AG, London and Discovery Global Opportunities Master Fund Limited and Indea. The learned senior counsel submitted that it was a case of mis-understanding that Terms and Conditions of Business were sent by the appellant earlier. In fact the appellant had confirmed on 14/03/2005 that all necessary information as was requested in the personal hearing had been submitted but the respondent informed only on 20th April, 2005 that what it wanted was ISDA agreement and not Terms and Conditions of Business. He submitted that had the respondent immediately informed the appellant on 24/02/2005 or after that what it required from the appellant was ISDA agreement, the same would have been supplied immediately. Obviously it was a case of genuine misunderstanding and it was wrong to term it "another instance of duplicity of UBS" as mentioned in para 9.17 of the impugned order.

54. It was submitted that it is not correct that non disclosure of Indian sounding names in the investigation lead to thwarting of investigation. It was submitted that contrary to what the respondent stated in the impugned order, the respondent already had the Indian sounding names in some cases including the names shown as signatories on behalf of Indea as early as July 1, 2004. Even in case of Caxton International Limited where there was an Indian sounding names of signatory to ISDA agreement the respondent had received from SEC the copy of ISDA agreement on 11/01/2005. In such circumstances it would not be correct on the part of respondent to conclude that because of not providing the ISDA agreement between UBS London and Caxton International Limited, the appellant was responsible for delaying the investigations about the antecedents of the signatories to the ISDA agreement.

77. The Caxton International vide their letter dated 09/09/2004 informed SEBI that Caxton International Limited was British virgin island company which had entered into a Price Return Equity Swap on NSE, S&P, CNX, NIFTY Index with UBS AG, London on 06/01/2004 and on 17/05/2004 the parties closed out the said Swap in order to prevent further losses. The respondent wanted confirmation whether any of the major investors of Caxton International Limited were FIIs. When the information was not forthcoming due to non-cooperation of the appellant the respondent sought the client agreement from Caxton International Limited from the Securities Exchange Commission, USA, which furnished the said ISDA agreement between Caxton International Limited and UBS AG, London. It shows that UBS AG would always be having aforesaid ISDA agreement. The agreement between UBS AG and Caxton International Limited had some signatories with Indian names which has further triggered an investigation. The entire conduct of UBS in relation to Caxton called for action from SEBI.