Request a Demo Today

Release Date: 23rd September 2014

To access the original FCA document, click here.


Barclays Bank Plc has been fined a substantial £37,745,000 by the Financial Conduct Authority (FCA) for failing to adequately safeguard client custody assets valued at £16.5 billion. This penalty is the largest ever imposed by the FCA or its predecessor, the Financial Services Authority (FSA), for breaches concerning client assets. The fine reflects severe deficiencies within Barclays’ Investment Banking Division’s systems and controls from November 2007 to January 2012, affecting numerous accounts.

The FCA highlighted that Barclays’ lack of attention to strict client asset protection rules presented a risk to its clients, potentially leading to significant losses, delays, or additional costs in the event of the bank’s insolvency. According to David Lawton, FCA Director of Markets, such failures undermine market confidence. Tracey McDermott, FCA Director of Enforcement and Financial Crime, pointed out that Barclays neglected to heed prior warnings and previous enforcement actions, thereby exposing its clients to unnecessary risk.

The investigation identified specific failures, including improper record-keeping across 95 custody accounts in 21 countries, which did not accurately reflect the responsible Barclays entity. Additionally, there were critical errors in account naming and data handling, suggesting that the assets belonged to Barclays rather than to its clients.

These breaches violated the FCA’s Client Asset Rules and the principles that require firms to have robust management systems and controls in place (Principle 3) and to safeguard client assets effectively (Principle 10). The enforcement action underlines the FCA’s commitment to consumer protection and the integrity of the UK financial system.

Barclays settled early in the investigation, receiving a 30% reduction on the potential fine of £53,921,619. This case serves as a stark reminder to other firms of the importance of compliance with FCA rules to avoid similar punitive measures. Firms are urged to ensure they have adequate systems and controls for managing client assets, reflecting lessons from past industry failures like Lehman Brothers. The need for vigilance in safeguarding client assets is crucial for maintaining trust and stability in the financial markets.

Back to the Dear CEO letter archives.