Barclays PLC (LSE:BARC) expects to take a £450mln charge and has delayed its share buyback by at least three months after issuing more structured and exchange traded notes than it had registered for sale.
The "securities offered and sold under its US shelf registration statement during a period of approximately one year exceeded the registered amount", the UK lender said in a statement on Monday.
This will require the bank to buy back the affected securities at their original price, it said.
The charge means that its £1bn share buyback programme announced in February is now expected to start in the second quarter of this year, the London-based bank said, rather than the first quarter.
The bank said it has commissioned an independent review of the facts and circumstances relating to the matter and the control environment related to such issuances.
Regulators are also conducting inquiries and making requests for information.
The development is the most significant yet faced by CS Venkatakrishnan since the American banker and former chief risk officer replaced Jes Staley as CEO in November.
It also brings the bank again to the attention of regulators after Staley departed following an investigation by the Financial Conduct Authority into how he had characterised his relationship with disgraced financier and convicted sex offender Jeffrey Epstein.
“It’s an obvious control issue and unhelpful for the new management” and for sentiment, said Joe Dickerson, an analyst at Jefferies International Ltd.
“It’s difficult to know whether there will be fines stemming from this.”
Shares of Barclays slipped 2.9%, underperforming the 0.3% gain for the FTSE 100 index.