The Financial Services Authority (FSA) has fined Barclays Capital Securities Ltd and Barclays Bank PLC (Barclays) £2.45m for failing to provide accurate transaction reports to the FSA and for serious weaknesses in systems and controls in relation to transaction reporting.
Firms are required to submit data for reportable transactions by close of business the day after a trade is executed. The FSA uses this data to detect and investigate suspected market abuse: insider trading and market manipulation.
The FSA discovered discrepancies in Barclays’ data while reviewing a suspected incident of market abuse by a third party. A subsequent review of Barclays’ transaction reporting arrangements revealed that it did not have adequate systems and controls in place to meet the transaction reporting requirements as well as a substantial number of errors in the data submitted to the FSA.
Alexander Justham, FSA director of markets, said:
“Complete and accurate transaction reports are an essential component of the FSA’s market monitoring work. Barclays’ reporting failures could have a damaging impact on our ability to detect and investigate suspected market abuse.
“The penalty imposed on Barclays is significantly higher than previous penalties imposed for transaction reporting errors. This reflects the serious nature of Barclays’ breaches and is a warning to other firms that the FSA will not tolerate inadequate systems and controls.”
Barclays’ breaches occurred despite repeated reminders to firms of their obligations to provide accurate data and the importance of compliance with the FSA rules on transaction reporting during the course of 2007 and 2008.
The firm has taken a number of steps to address the concerns raised including commissioning a review of its transaction reporting process and committing extensive resources to improve its processes and resolve the errors.
Barclays co-operated fully with the FSA in the course of its investigation and agreed to settle at an early stage. In doing so it qualified for a 30% discount. Without the discount the fine would have been £3.5m
The Final Notice can be found on the FSA website
Firms are required to submit data for reportable transactions by close of business the day after a trade is executed. The FSA uses this data to detect and investigate suspected market abuse: insider trading and market manipulation.
The FSA discovered discrepancies in Barclays’ data while reviewing a suspected incident of market abuse by a third party. A subsequent review of Barclays’ transaction reporting arrangements revealed that it did not have adequate systems and controls in place to meet the transaction reporting requirements as well as a substantial number of errors in the data submitted to the FSA.
Alexander Justham, FSA director of markets, said:
“Complete and accurate transaction reports are an essential component of the FSA’s market monitoring work. Barclays’ reporting failures could have a damaging impact on our ability to detect and investigate suspected market abuse.
“The penalty imposed on Barclays is significantly higher than previous penalties imposed for transaction reporting errors. This reflects the serious nature of Barclays’ breaches and is a warning to other firms that the FSA will not tolerate inadequate systems and controls.”
Barclays’ breaches occurred despite repeated reminders to firms of their obligations to provide accurate data and the importance of compliance with the FSA rules on transaction reporting during the course of 2007 and 2008.
The firm has taken a number of steps to address the concerns raised including commissioning a review of its transaction reporting process and committing extensive resources to improve its processes and resolve the errors.
Barclays co-operated fully with the FSA in the course of its investigation and agreed to settle at an early stage. In doing so it qualified for a 30% discount. Without the discount the fine would have been £3.5m
The Final Notice can be found on the FSA website
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