Barclays Capital Securities and Barclays Bank have been fined £2.45 million by the Financial Services Authority (FSA) for failing to provide accurate transaction reports and for serious weaknesses in its systems and controls in relation to transaction reporting.
Under its rulings, the FSA requires firms to submit data for reportable transactions by close of business the day after a trade is executed. 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.
The breaches by Barclays 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.
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.”