FSA fines Barclays £2.45m
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Firms are required to submit data for reportable transactions by close of business the day after a trade is executed.
An FSA trading review, conducted from November 1, 2007 to October 31, 2008, revealed that a total 57.5 million reportable transactions were either reported inaccurately, with incomplete data, or not reported at all.
Barclays’ errors impacted 100 per cent of Barclays’ reportable transactions across every core reportable asset class except cash equities. Approximately 84 per cent of reportable transactions in the cash equities class were impacted.
The FSA says Barclays failed to submit a report at all for 17 million transactions and failed to accurately report 5.8 million cash equity transactions.
It reported the incorrect trade time for 24.6 million transactions and used the incorrect code to identify the relevant counterparty or client for whom Barclays had acted in relation to 7 million transactions.
Barclays also failed to identify the underlying instrument for 2.2 million transactions and failed to identify whether the transaction was a buy or sell in relation to 3.8 million transactions.
The errors occurred across eight different reporting systems used by Barclays to provide data to the FSA.
The FSA says Barclays’ breaches occurred despite repeated reminders to firms of their obligations to provide accurate data and the importance of compliance with FSA rules on transaction reporting during 2007 and 2008.
Barclays has commissioned a review of its transaction reporting process and committed resources to improve its processes and resolve the errors.
The regulator says 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 per cent discount. Without the discount the fine would have been £3.5m.
FSA director of markets Alexander Justham says: “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.”
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Readers' comments (7)
Anonymous | 8 Sep 2009 11:00 am
They need the money..
Pension black hole, massive loans with other banks. Yes they do need the money and where better to start than with the first ever fine for Barclays that I know of? Still can't work out why.
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Richard Johnson | 8 Sep 2009 11:03 am
FSA Fines Barclays for Lack of Transaction Reporting
It is significant that the FSA is still enmeshed in the trivia of "Transaction Reporting" whilst ignoring the root cause of disasters like the credit crunch that have cost us, the UK taxpayers, billions of pounds. Isn't it time that these overpaid clerks stepped aside and let a proper regulator take over. Incidentally, who do you think will pay the £2.45 million pound fine? Yes....it's us, the customers! Is that sensible regulation?
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Jim Payne | 8 Sep 2009 11:15 am
No sleep lost at Barclays.
A £2.45m fine for a company that makes what? Perhaps four times that PER DAY!
They probably held up their collective hands, said sorry, promised a review and settled the DISCOUNTED fine ASAP.Then they could just get on with the days trades. Probably didn't even break their stride let alone loose any sleep over this matter.
They probably get tax relief on the £2.45m as well. Just another business expense.
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Michael White CEO Email Mortgages.com | 8 Sep 2009 11:36 am
FSA very quick to act - two years!
It is illuminating to see the FSA treating its big bank customers so 'fairly' and giving them a discount for prompt payment of a £2.45m fine after being found pretty incompetent in transaction reporting. It appears the problems occurred over more then a two year period, Apparently, “ Barclays’ reporting failures could have a damaging impact on our ability to detect and investigate suspected market abuse” says FSA Director of Markets, Alexander Justham. Quite bizarre to see the FSA taking up to 2 years to 'promptly' to protect the markets from possible abuse....priceless.
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John Harding | 8 Sep 2009 12:18 pm
FSA employees
I like Richard Johnson's comment about 'overpaid clerks' at the FSA.
My dictionary explains a clerk as someone who 'works in an office performing such tasks as keeping records, attending to correspondence, or filing.' Seems about the right description for the FSA as a whole. Really this is all the 'organisation' sic. is capable of.
Richard's comments on the FSA STILL concentrating on the trivia while ignoring root the causes of the problems demonstrates that they still don't, as an 'organisation' understand the problems. They are trying to continue with business as usual and still "Cannot see the wood for the trees"
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Julian Stevens | 8 Sep 2009 1:02 pm
FSA fines Barclays £2.45m
A mere flea bite. And a very late one at that. What about all the high commission, low performance rubbish that Barclays are selling day in, day out via all their branches?
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Anonymous | 8 Sep 2009 2:49 pm
Scaling up the fine...
A fine of £3million (pre-discount) for 57.5 million inaccurately reported transactions, 17million of which were not reported at all, seems pathetically small. On the basis the FSA fined one person £20k recently for failing to detect ONE suspicious transaction, surely the Barclays fine should have been £340,000,000,000. Or is this just another case of the FSA being biased towards large financial institutions?
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