The Financial Industry Regulatory Authority (FINRA) announced today that it has fined Barclays Capital Inc. $1.3 million for systemic Order Audit Trail System (OATS) reporting violations and related supervisory failures.
FINRA rules require firms to transmit to OATS complete and accurate data relating to events in the lifecycle of an order, called Reportable Order Events (ROEs). FINRA found 15 system issues at Barclays Capital that gave rise to OATS reporting violations. Barclays Capital transmitted more than 3 billion inaccurate or incomplete ROEs to OATS, including omitted special handling codes; inaccurate timestamps, execution quantities and member type codes; and duplicate or erroneous reports. In addition, Barclays Capital failed to transmit millions of ROEs to OATS. FINRA also found that Barclays Capitals supervisory system was not reasonably designed to achieve compliance with its OATS reporting obligations.
When firms fail to transmit OATS data or transmit inaccurate or incomplete data to OATS, market integrity is compromised because potential violative conduct, including manipulative activity and customer harm, may be obscured, said Thomas Gira, Executive Vice President and Head of Market Regulation at FINRA. OATS data is essential to FINRAs automated equities surveillance program and is therefore critical to investor protection.
In concluding this settlement, Barclays Capital neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.
Investors can obtain more information about, and the disciplinary record of, any FINRA-registered broker or brokerage firm by using FINRA’s BrokerCheck. FINRA makes BrokerCheck available at no charge. In 2015, members of the public used this service to conduct 71 million reviews of broker or firm records. Investors can access BrokerCheck at www.finra.org/brokercheck or by calling (800) 289-9999. Investors may find copies of this disciplinary action as well as other disciplinary documents in FINRA’s Disciplinary Actions Online database. Investors can also call FINRA’s Securities Helpline for Seniors at (844) 57-HELPS for assistance or to raise concerns about issues they have with their brokerage accounts and investments.
FINRA, the Financial Industry Regulatory Authority, is the largest independent regulator for all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. FINRA touches virtually every aspect of the securities business – from registering and educating all industry participants to examining securities firms, writing rules, enforcing those rules and the federal securities laws, and informing and educating the investing public. In addition, FINRA provides surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. FINRA also administers the largest dispute resolution forum for investors and firms. For more information, please visit www.finra.org.