Barclays fined £783,800 for collapsed payments firm Premier FX

“Premier FX, which handled money on behalf of other people, presented particularly high risks of financial crime and fraud.”

Barclays FX

The Financial Conduct Authority (FCA) has fined Barclays £783,800 for oversight failings in its relationship with collapsed payments firm Premier FX, of which Barclays was the sole banker in the UK.

The bank agreed voluntarily to cover the losses of Premier FX customers whose claims have been accepted by Premier FX’s liquidators, with distribution amounting to 9p for every £1 lost, which means a voluntary payment of £10,076,943.75 by the end of March 2022. All 167 customers of Premier FX with accepted claims will have 100% of their money returned.

Still, the FCA is fining Barclays £783,800 because the bank failed to make enquiries to ensure that Premier FX’s actual business activity aligned with Barclays’ expectations and did not identify that Premier FX’s internal controls were deficient.

Premier FX failed to safeguard its customers’ money and seriously misled its customers about the services it was authorized to provide.

The FCA censured the firm in February 2021 instead of imposing a substantial financial penalty because Premier FX was in liquidation and there was a significant liability to its creditors, most of whom are consumers.

Mark Steward, Executive Director of Enforcement and Market Oversight, 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.”

In 2021, Barclays rolled out new products and features for its institutional FX trading platform, BARX FX.

The enhanced solution now leverages BARX Book, which is part of BARX Gator, to gives clients access to unique principal liquidity streams, as well as an increased number of external liquidity providers.

Gator Adapt was also introduced to address institutional algo needs. This one in particular allows clients to manage the trade-off between arrival price slippage and execution price risk and clients have the flexibility to choose an execution style which is intended to minimize market impact for a given level of risk.

BARX Direct, the third new feature, is the platform’s improved low latency solution which uses innovative pricing models, predictive analytics, and an optimized co-location strategy.

The institutional FX platform enables clients to optimize execution performance by accessing deep pools of liquidity across equities, fixed income, futures and FX.