FINRA Fines Barclays $650,000 for Systemic TRACE Reporting Issues

The Financial Industry Regulatory Authority (FINRA) issued an announcement that Barclays Capital Inc. ("Barclays") submitted the Acceptance Letter for the purpose of proposing a settlement of some alleged rule violations provided by FINRA. As an agreement, Barclays agreed to pay a $650,000 fine.

On December 1, 2020, the settlement offer was accepted by FINRA.

The settlement began from what FINRA dubbed as "systemic TRACE reporting issues" that Barclays had during the period from January 2017 through April 2019. These issues resulted in violations of FINRA rules.

From January 2017 through April 2019, Barclays had systemic TRACE reporting issuesthat caused numerous violations of FINRA Rules 6730 and 2010. Barclays:

(i) failed totimely report transactions in TRACE-eligible Corporate Bonds and TRACE-eligible Agency Debt Securities, 

(ii) over-reported Treasury transactions to TRACE, and

(i)reported the incorrect time of execution for Corporate transactions to TRACE.

In addition, the firm violated Exchange Act Rule 17a-3 and FINRA Rule 2010 by failing to show the correct time of execution on the memoranda of hundreds of brokerage orders. The firm also failed to establish a supervisory system reasonably designed to achieve compliance with TRACE reporting rules in violation of FINRA Rules 3110 and 2010.

Besides the fine of $650,000, Barclays has agreed to a censure and an undertaking to revise its written supervisory procedures regarding the over-reporting of Treasury transactions eligible for TRACE reporting.