Barclay’s Faces Further Forex Fines

November 20, 2015

Barclays BankBritish banking and financial service giant Barclay’s is once again facing fines for its trading practices in the Foreign Exchange market. Sources at the New York Department of Financial Services have said that the bank could be facing a fine of up to $100 million. This fine, if it comes to fruition, will make the third such case this year involving Barclay’s Forex practices.

The trading practice in question is known in the Forex industry as the last look option. It is a remnant of the days of phone-based currency trading, when traders would often perform a final check of the market before giving the final word to execute a trade. Now, of course, real-time market data has made such a practice unnecessary. Instead, last look options have developed into a means by which major banks can back out of trades in the Forex market if they see that the market is moving against them, even if the trade has already been executed. Many major banking Forex platforms have already done away with the practice, but some, such as FXAll, still allow banks to use their last look option. The practice has been called into question many times, and United States financial regulations ban the abuse of the privilege to exit trades when the trade is no longer profitable.

This will not be the first time Barclay’s has faced such allegations. In May, the firm agreed to pay $650 million in fines over the same matter. Earlier this month, another $120 million was agreed to, this time over a smaller volume of trades. The figure of a further $100 million has not been officially confirmed by either Barclay’s or the New York Department of Financial Services.