Securities Regulation Daily Barclays pays $500K to settle trading charges
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Thursday, September 22, 2016

Barclays pays $500K to settle trading charges

By Mark S. Nelson, J.D.

Barclays Bank PLC agreed to pay a $500,000 civil monetary penalty for its failure to document and produce records for thousands of metals and energy trades that involved an Exchange for Related Position (EFRP) in violation of CFTC Regulations 1.31 and 1.35. The global banking services firm settled the matter without admitting or denying the Commission’s findings (In the Matter of Barclays Bank PLCCFTC Docket No. 16–30, September 22, 2016).

According to the CFTC, Barclays’s U.S. futures commission merchant affiliate, Barclays Capital, Inc., cleared and reported more than 3,700 EFRP trades through CME Group Inc.’s ClearPort between September 2009 and mid-October 2012. When the CFTC asked Barclays to produce related confirmations, the bank was able to produce "most" confirmations, but could not provide documentation for over 1,300 EFRP trades. The CFTC’s Enforcement Division first requested the documents in February 2013 and it took Barclays until June 2015 to fully respond.

The Commission alleged that Barclays violated CFTC Regulation 1.31(a)(2), which requires firms like Barclays to "promptly" produce EFRP trade documentation when requested by the CFTC. Likewise, CFTC Regulation 1.35(a-2)(2) requires FCM customers to make, keep, and produce to the CFTC on request documents about EFRP trades.

Barclays was ordered to stop violating these regulations and to pay a civil monetary penalty of $500,000. The Commission’s order noted Barclay’s cooperation and the bank’s effort to implement remedial measures before the CFTC began its investigation. Barclays has been provisionally registered with the Commission as a swap dealer for nearly four years.

The matter is CFTC Docket No. 16–30.

Companies: Barclays Bank PLC; Barclays Capital, Inc.; CME Group Inc.

MainStory: TopStory CFTCNews ClearanceSettlement CommodityFutures Derivatives Enforcement ExchangesMarketRegulation FinancialIntermediaries InternationalNews Swaps

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