Barclays Capital Fined $800,000 by CFTC for Supervision Failures
- Supervisory failures over exchange and clearing fee processing led to customers being overcharged.
The US Commodity Futures Trading Commission (CFTC) today issued an order requiring Barclays Capital, Inc. (Barclays), a Connecticut firm, to pay penalties for failing to diligently supervise the processing of Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term and clearing fees it charged customers for trading and clearing Chicago Mercantile Exchange products from January 2011 to April 2015.
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Barclays, which is registered with the CFTC as a Futures Commission Merchant, is required to pay $800,000 in penalties and refrain from violating the CFTC Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term governing diligent supervision.
Supervisory Failures
Customer transactions executed on exchanges are subject to payment of exchange and clearing fees that are applied to each transaction in the normal course of business.
Clearing firms such as Barclays receive invoices for these fees from the exchange clearinghouses, which the firms pass on to their customers.
However, the CFTC found that Barclays failed to implement and maintain adequate systems for reconciling invoices from exchange clearinghouses with the amounts of fees actually charged to its customers through its back-office accounting software.
Barclays also failed to implement and maintain adequate policies and procedures regarding reconciliation of exchange and clearing fees, including failing to draft procedures and adequately train staff on how to complete the reconciliations.
Customers Overcharged
According to the CFTC, this led to instances in which Barclays overcharged some customers to an aggregate amount of $1.1 million.
Barclays reportedly discovered the problem in 2012 and has since taken remedial steps, including refunding adversely affected customers.
This is the second action that the CFTC has brought over a clearing firm’s supervisory failures over fee processing. In August 2014, the CFTC ordered Merrill Lynch, Pierce, Fenner & Smith to pay a $1.2 million penalty relating to its processing of futures exchange and clearing fees charged to customers.
The US Commodity Futures Trading Commission (CFTC) today issued an order requiring Barclays Capital, Inc. (Barclays), a Connecticut firm, to pay penalties for failing to diligently supervise the processing of Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term and clearing fees it charged customers for trading and clearing Chicago Mercantile Exchange products from January 2011 to April 2015.
Take the lead from today’s leaders. FM London Summit, 14-15 November, 2016. Register here!
Barclays, which is registered with the CFTC as a Futures Commission Merchant, is required to pay $800,000 in penalties and refrain from violating the CFTC Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term governing diligent supervision.
Supervisory Failures
Customer transactions executed on exchanges are subject to payment of exchange and clearing fees that are applied to each transaction in the normal course of business.
Clearing firms such as Barclays receive invoices for these fees from the exchange clearinghouses, which the firms pass on to their customers.
However, the CFTC found that Barclays failed to implement and maintain adequate systems for reconciling invoices from exchange clearinghouses with the amounts of fees actually charged to its customers through its back-office accounting software.
Barclays also failed to implement and maintain adequate policies and procedures regarding reconciliation of exchange and clearing fees, including failing to draft procedures and adequately train staff on how to complete the reconciliations.
Customers Overcharged
According to the CFTC, this led to instances in which Barclays overcharged some customers to an aggregate amount of $1.1 million.
Barclays reportedly discovered the problem in 2012 and has since taken remedial steps, including refunding adversely affected customers.
This is the second action that the CFTC has brought over a clearing firm’s supervisory failures over fee processing. In August 2014, the CFTC ordered Merrill Lynch, Pierce, Fenner & Smith to pay a $1.2 million penalty relating to its processing of futures exchange and clearing fees charged to customers.