Barclays Capital Inc. (CRD# 19714 / SEC# 8-41342) was fined $1.3 million by the Financial Industry Regulatory Authority (FINRA) for supervisory failures related to systemic reporting violations to the Order Audit Trail System (OATS) on Wednesday, August 3.
Barclays Capital neither denied nor admitted to the charges in concluding the settlement, but consented to the entry of FINRA’s findings.
Under FINRA’s regulations, firms are required to transmit accurate and complete OATS data that relates to the events in an order’s lifecycle, also known as Reportable Order Events (ROEs). During FINRA’s investigation, they discovered that Barclays Capital had 15 system issues that resulted in the OATS reporting violations. Among the over 3 billion incomplete or inaccurate ROEs to OATS, including:
- Omitted special handling codes
- Inaccurate timestamps
- Member type codes and execution quantities
- Erroneous or duplicate reports
Head of Market Regulation and Executive Vice President at FINRA Thomas Gira had this to say about the fines:
“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. OATS data is essential to FINRA’s automated equities surveillance program and is therefore critical to investor protection.”
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