FCA fines Barclays for FX controls failings: FCA has levied a record £284,432,000 fine on Barclays Bank PLC (Barclays) for failing to control business practices in its London FX business. FCA said the failing was particularly serious in light of its potential impact on the systemically important spot FX market. The failings occurred in Barclays’ London voice trading FX business, were extensive, and lasted from January 2008 to October 2013. FCA found:
- the failings in systems and controls gave traders the opportunity to engage in behaviours that put Barclays’ interests ahead of those of its clients, other market participants and the wider UK financial system;
- inappropriate activities included inappropriately sharing information about clients’ activities and attempting to manipulate spot FX currency rates;
- Barclays primarily relied on its front office FX business to identify, assess and manage the relevant risks, but the front office did not see obvious risks. Moreover, some of those responsible for front office management were aware of or at times involved in the misconduct;
- collusion with other banks' traders, through which traders determined their trading strategies, and attempted to manipulate fix rates and trigger client stop loss orders;
- the control failings also meant that traders had the opportunity to benefit Barclays’ trading positions in FX options by attempting to manipulate fix or spot FX market rates to prevent Barclays’ clients from receiving pay-outs from the options they had purchased from Barclays;
- examples of inappropriate sharing of confidential information by spot FX traders and sales staff; and
- the failings persisted despite enforcement action against Barclays for similar control failings in relation to LIBOR and the Gold fixing.
FCA noted that Barclays was open and cooperative during the investigation and benefited from a 20% discount for settling at stage 2 of the investigation. (Source: FCA Fines Barclays for FX Control Failings)
FCA fines and bans adviser: FCA has fined Paul Reynolds £290,344 and banned him for lack of integrity. It found that, over a five-year period, he recommended complex and high-risk products to clients, many of whom were on low incomes and had little or no investment experience, in circumstances where he could not justify that the investments were suitable. FCA found letters on file that clients had not received, and evidence that clients did not know they had invested in unregulated investments or the risks of having done so. (Source: FCA Fines and Bans Adviser)
FCA issues data bulletin: FCA has published the May issue of its data bulletin. This issue contains items on:
- the FCA Contact Centre;
- complaints about firms;
- approved persons; and
- skilled person reports.
(Source: Data Bulletin: May Issue (Issue 3))