CFTC Charges Barclays Bank $560K For Inaccurate Large Trader Reports

The CFTC has imposed penalties on the British bank for failing to submit accurate LTRs.

The U.S. Commodity Futures Trading Commission (CFTC) today charged Barclays Bank PLC for failing to submit accurate large trader reports for physical commodity swap positions, in violation of the Commodity Exchange Act. Barclays Bank has been provisionally registered with the CFTC as a swap dealer since 12 December, 2012.

Large Trader Reports

Large trader reporting for physical commodity swaps is essential to the CFTC’s ability to conduct effective surveillance of markets in U.S. physical commodity futures and economically equivalent swaps. Swap dealers are required to submit large trader reports which are expected to be in full compliance with the commission’s regulatory requirements as of 1 March 2013.

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According to the CFTC, both prior to and during the beginning of the mandatory compliance period, from July 2012 to March 2013, Barclays submitted large trader reports with incorrect position information and commodity reference price indicators for certain types of transactions.

Innaccurate Position Information

Subsequently in 2014, Barclays submitted some large trader reports containing inaccurate position information caused by missing or inaccurate prices in crude oil, natural gas, gasoline, heating oil, and agricultural products.

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As a result of these errors, Barclays inaccurately reported its positions in various commodities and in many instances, the data processing and reporting systems used to generate the large trader reports identified potential issues but failed to correct the errors before they were submitted.

The CFTC has also found that Barclays subsequently detected these errors, self-reported them, and thereafter submitted some corrected reports. However, from July 2012 to November 2012, Barclays failed to keep records as required and was unable to submit complete corrected reports due to the inadvertent deletion of some of the underlying data.

The CFTC therefore requires Barclays to pay $560,000 in penalties and has further been ordered to refrain from committing any further violations of the Act and CFTC Regulations, as charged.

 

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