Barclays fined £2.45 million
Barclays has been fined £2.45 million by the City watchdog for its failure to provide accurate transaction reports for its traders.
The banking giant was hit with the fine after an investigation into market abuse by the Financial Services Authority (FSA) found 57.5 million transactions had either not been reported or incompletely reported. The fine is the eighth highest ever issued by the FSA.
"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," says Alexander Justham, director of markets at the FSA.
Under FSA regulations, banks are required to provide data for all reportable transactions that are carried out by the close of play the day after the trade was executed. Barclays' failure to comply with this could have left the FSA unable to detect market abuse.
Although the discrepancies were uncovered by an FSA investigation into suspected insider trading, Barclays was unconnected to the third party deals.
Justham adds: "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."
However, he said the bank had moved to address the issues raised and it was now "commissioning a review of its transaction reporting process and committing extensive resources to improve its processes and resolve the errors".
Originally, the bank had been set for a fine of £3.5 million, but dodged that bullet by agreeing to settle the investigation early after the FSA offered a 30% discount.
The news did little damage to the bank's shares which were down marginally to 359.2p in early afternoon trading.
The Financial Services Authority is an independent non-governmental body, given a wide range of rule-making, investigatory and enforcement powers in order to meet its four statutory objectives: market confidence (maintaining confidence in the UK financial system), financial stability, consumer protection and the reduction of financial crime. The FSA receives no government funding and is funded entirely by the firms it regulates, but is accountable to the Treasury and, ultimately, parliament.