Barclays will pay $350,000 to settle allegations that it did not apply market access controls and procedures to options orders placed through one of its risk management systems, Finra said.

According to a consent agreement filed last week, from February 2014 through September 2019 the Index Options Flow Derivatives Trading Desk of the New York-headquartered brokerage placed orders to participate in monthly “special opening quotations” (SOQ) of certain products. Those orders were placed in one of its risk management systems.

In order to properly maintain its risk management controls and fit within preset limits on financial exposure, in 2014 Barclays implemented a policy to identify all of the systems at the firm that required the application of market access controls and procedures, the filing said.

The firm mischaracterized the system used by the derivatives desk as not having order entry and execution capability, and therefore excluded the system from the policy, the filing said. “As a result ... the firm did not apply market access controls and procedures to orders that the system generated and routed,” Finra stated.

Barclays officials could not be reached for comment.

Over the five years, Barclays ended up participating in 48 monthly SOQs and routing some 19,500 orders for 2.5 million contracts to the market unchecked, of which 9,500 orders for 1.125 million contracts were executed, Finra said.

“As a result of this failure, the firm did not prevent the entry of erroneous orders totaling $11,800,000 rather than the intended $118,000 through its participation in an SOQ on June 19, 2019. This caused the derivatives Desk to exceed its assigned $4 billion capital limit by approximately $8 billion,” the filing stated.

Because of that mishap, Barclays investigated what had happened and then recharacterized the system to fall within the policy, the filing said, adding that beginning in September 2019, the correct controls and procedures were being assigned.

This was the third fine Finra has levied at Barclays for controls issues, the filing said. In January 2016, Barclays agreed to a $35 million fine for alleged violations related to the firm’s capital and credit threshold controls. And in April 2017, the firm paid $105,000 for permitting a trader to override an alert and not applying pretrade price controls to orders with pegged instructions.