British regulators hit banking giant, Barclays Bank plc, with a £38 million ($68.4 million) fine for filing to properly protect client assets within its investment banking division.

The UK Financial Conduct Authority (FCA) has fined Barclays for failing to properly protect clients’ custody assets worth £16.5 billion. As a result, it says that clients risked incurring extra costs, lengthy delays, or losing their assets, if Barclays had become insolvent. The £37,745,000 penalty is the highest fine ever imposed in the UK for a breach of client asset protection rules.

The FCA says that Barclays failed to properly apply its asset protection rules when opening 95 custody accounts in 21 countries. It says that the bank’s records did not correctly reflect which company within its investment banking division was responsible for the assets in the accounts, and that it failed to set up appropriate legal arrangements with these companies. These failings were compounded by flaws in account naming, or incorrect data, that indicated assets belonged to Barclays instead of its clients, it adds.

The bank agreed to settle the case at an early stage, qualifying for a 30% discount. Otherwise, the FCA says that the penalty would have been £54 million.

“Safeguarding client assets is key to maintaining market confidence if firms fail — Barclays lack of focus on the rules was unacceptable. Our on-going scrutiny of firms’ compliance reflects the importance of the regime, which protects custody assets worth £10 trillion held in the UK,” said David Lawton, FCA director of markets.

Barclays said in a statement that it accepts the FCA’s finding that its investment bank breached the rules between November 2007 and January 2012. It stresses that the bank did not profit from this issue, and that customers didn’t lose any money as a result. It also notes that the problem did not affect the retail bank, or any other part of the bank. The firm also says that it reported the issue to the FCA, and that it has been resolved as part of a firm-wide effort to enhance governance and controls.

Tracey McDermott, director of enforcement and financial crime at the FCA, noted, “Barclays failed to apply the lessons from our previous enforcement actions, numerous industry-wide warnings, and exposed its clients to unnecessary risk. All firms should be clear after Lehman that there is no excuse for failing to safeguard client assets.”