It turns out that an error at Barclays Bank led to the suspension of creations for two of its exchange-traded notes (ETNs) earlier this month.

On March 14, Barclays halted new share creations of the iPath Pure Beta Crude Oil ETN (OIL) and the iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX).

At the time, the firm specifically said it was not due to Russia’s invasion of Ukraine, which had brought turmoil to the markets, or other market dynamics but was because the bank lacked the issuance capacity to create any further shares in the two ETNs.

ETNs are debt notes issued by a bank. They sometimes combine stock positions with options overlays or use other sophisticated strategies to track an underlying index.

Barclays said that it would return the ETNs to normal operations as soon as it could accommodate demand for future issuances.

However, today, a statement from the bank added some additional colour. It turns out that the firm had overissued shares of the ETNs, exceeding the amount that had been allowed by its shelf registration statement for a period of roughly one year, according to the document.  

A footnote in the press release notes that the firm registered to a maximum aggregate offering price of $20.8bn, an amount that it exceeded by roughly $15.2bn. 

Furthermore, the document said that under the “right of rescission” – which allows consumers to cancel a loan agreement that they have entered into – it will repurchase some of the issued ETNs at their original purchase price. The “right of rescission” is more typically seen with transactions such as mortgage loans but it means that the estimated loss to the firm is roughly £450m.  

Barclays noted the situation means it will postpone its planned buyback programme from Q1 to Q2.

It said in a statement: “Barclays has commissioned an independent review of the facts and circumstances relating to this matter including, among other things, the control environment related to such issuances.”

The firm’s line-up of iPath ETNs in the US currently includes 27 products with nearly $3bn assets under management (AUM).

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