A U.S. derivatives regulator has sanctioned Barclays Capital Inc. for back-office issues that led to overcharging exchange and clearing fees.
The U.S. Commodity Futures Trading Commission (CFTC) settled charges against Barclays, ordering it to pay a US$800,000 civil monetary penalty and to cease and desist from further violations. The CFTC says the firm failed to properly supervise the processing of the exchange and clearing fees that it charged customers for trading on the Chicago Mercantile Exchange Inc.
The CFTC says failings in Barclays’ systems for reconciling invoices from exchange clearing houses with the fees actually charged to its customers led to it overcharging customers by approximately US$1.1 million in total. The regulator says Barclays discovered the problem in 2012 and took remedial steps, including refunding adversely affected customers.
This is the second time the CFTC has brought an enforcement action in connection with a clearing firm’s supervisory failures over fee processing. In 2014, it ordered Merrill Lynch to pay a US$1.2 million penalty.