Barclays handed £783k fine by FCA

Barclays has been fined £783,000 by the FCA for oversight failings in its relationship with collapsed payments firm, Premier FX.

The bank was Premier FX’s sole banker in the UK, and the FCA found that Barclays failed to make enquiries to ensure that Premier FX’s actual business activity aligned with its own expectations, and did not identify that the firm’s internal controls were deficient.

According to the regulator, this constituted a failure by Barclays to conduct its business with due skill, care and diligence.

The financial penalty takes into account that Barclays has agreed voluntarily to cover the losses of Premier FX customers, whose claims have been accepted by Premier FX’s liquidators.

Following the distribution by the liquidator amounting to 9p for every £1 lost, Barclays’ voluntary payment of £10.08m will make up the difference, meaning all 167 customers of Premier FX with accepted claims will have 100% of their money returned. The voluntary payment will be distributed to these customers by the liquidators by the end of March.

The FCA had publicly censured Premier FX in February last year for failing to safeguard its customers’ money and seriously misleading its customers about the services it was authorised to provide. The regulator revealed it would have imposed a substantial financial penalty on Premier FX because of the serious failings in that case, but considered a public censure a more appropriate sanction, given that Premier FX was in liquidation and there was a significant liability to its creditors.

FCA executive director of enforcement and market oversight, Mark Steward, commented: “Premier FX, which handled money on behalf of other people, presented particularly high risks of financial crime and fraud.

“Barclays was aware of these high risks in providing banking services to Premier FX but failed to take reasonably appropriate steps to mitigate those risks. Barclays’ agreement to meet the deficiency in Premier FX’s funds mitigates the actual losses to Premier FX’s customers.

“This is a significant step to the credit of the bank and has reduced substantially the sanction that otherwise would have been imposed.”

The FCA confirmed that this action ends its investigation into Premier FX and associated parties.

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