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The Financial Services Authority or FSA has fined Barclays Bank PLC (BARC.LN), GBP7.7 million for failures in relation to the sale of two funds, and said Barclays will contact customers and pay redress where appropriate.

MAIN FACTS:

-Between July 2006 and November 2008 Barclays sold Aviva's Global Balanced Income Fund and Global Cautious Income Fund to 12,331 people with investments totalling GBP692 million.

-However, there were a number of serious failings in the way the funds were sold. These include:

-* Failing to ensure the funds were suitable for customers in view of their investment objectives, financial circumstances, investment knowledge and experience;

-* Failing to ensure that training given to sales staff adequately explained the risks associated with the funds;

-* Failing to ensure product brochures and other documents given to customers clearly explained the risks involved and could not mislead customers; and

-* Failing to have adequate procedures for monitoring sales processes and responding promptly when issues were identified.

-The FSA's investigation revealed that even though Barclays had itself identified potentially unsuitable sales as early as June 2008, it did not take appropriate and timely action.

-During the investigation Barclays continued to carry out a past business review to evaluate the suitability of the sales of both funds

-As a result Barclays has already paid GBP17 million in compensation and the FSA estimates up to GBP42 million further could be paid to customers who received unsuitable advice.

-The fine is the highest fine imposed by the FSA for retail failings.

-By Razak Musah Baba, Dow Jones Newswires; 44-20-7842-9275; razak.baba@dowjones.com