Barclays to pay $1.1m fine for US data reporting errors

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Barclays to pay $1.1m fine for US data reporting errors

Failed to update IT systems.

Wall Street's self-funded watchdog fined UK bank Barclays US$800,000 (A$1.1 million) for violations related to how the bank reported stock trades over more than two years, which hampered the regulator's ability to properly monitor the market.

The Financial Industry Regulatory Authority said Barclays Capital, a unit of the company, did not properly update its IT systems to comply with regulations from August 2009 that required executing brokers to report trades, as well as the name of the executing parties of the trades, to FINRA.

As a result, between August 3 2009 and Decemeber 11 2012, Barclays failed to identify the correct executing party on around 90 million reports with other broker dealers that were sent to FINRA's trade reporting facility.

"Reporting inaccurate data to FINRA impacts the integrity of FINRA's audit trail and the ability of regulators to conduct appropriate surveillance of member firm's trading activity," the regulator said.

Barclays consented to the fine without admitting or denying the allegations, and declined comment.

The bank was fined US$10,000 by FINRA in December 2010 for equity trade reporting violations stemming from November 2008.

Like most big banks, Barclays operates its own inhouse electronic trading venue, known as a "dark pool," where other brokers can send stock orders to be executed rather than sending them to a stock exchange.

New York's attorney general in June 2014 accused Barclays of fraud over how it operated within its dark pool, saying it misled investors to boost its own profits. Barclays has denied any wrongdoing and said no investors had been harmed.

Separately, FINRA settled a case with a unit of UBS Group last week which opens the bank up to new scrutiny of its compliance supervision of its electronic trading platform over the next nine months.

The case stemmed from a follow-up examination from another FINRA case in which UBS paid US$12 million in fines in 2011 and agreed to fix certain data reporting problems.

In a follow-up examination two years later, the regulator found ongoing violations in which batches of trades entered electronically by UBS into a FINRA audit system were incomplete or inaccurate. 

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