Strategic Shareholder Climate and Risk Financial Financial Barclays PLC 189 report information sustainability report Governance review review statements Annual Report 2022 Directors' report: Over-issuance of Securities – Shareholder Q&A (continued) • oversight of discussions with the How has Barclays reflected the Has Barclays been the subject of Group’s key regulators including the financial consequences of the any regulatory enforcement SEC, PRA, FCA and FRC Over-issuance of Securities in its action in relation to the Over- • engagement with Barclays’ shareholders financial statements? issuance of Securities? to discuss the Over-issuance of It was concluded that it was not necessary In September 2022, the SEC issued an Securities and Barclays’ response to it; or appropriate, under UK company law and order announcing the resolution of its • consideration of the implications of the financial reporting standards, to revise the investigation of BPLC and BBPLC relating Over-issuance of Securities for BPLC’s financial statements of BPLC or BBPLC for to the Over-issuance of Securities. financial statements, including the the year ended 31 December 2021 Pursuant to the terms of the resolution, approval of the restatement of the included in their respective 2021 UK BPLC and BBPLC paid a combined penalty 1 financial statements included in the Annual Report and Accounts to reflect the of $200m (£165m ) , without admitting or BPLC 2021 Annual Report on Form 20-F impact of the Over-issuance of Securities. denying the SEC’s findings, and BBPLC filed with the SEC, as well as the Instead, each of BPLC and BBPLC has agreed to undertakings requiring the amendment of such report restated the prior period comparatives in adoption and implementation of certain the Group’s quarterly and half-year results enhancements to controls and • noting the approval by BBPLC of the in 2022, and in their respective 2022 UK governance with respect to its shelf launch of the rescission offer; Annual Report and Accounts, to reflect the registration statements filed with the SEC. • oversight of the settlement with the impact of the Over-issuance of Securities. The SEC found that BBPLC’s previously SEC in relation to the Over-issuance of announced rescission offer satisfied its As a US foreign private issuer, each of Securities requirements for disgorgement and BPLC and BBPLC is required to file with the • oversight of the remediation of the prejudgment interest. SEC annual reports on Form 20-F, material weakness in internal control including financial statements. In May How has Barclays assessed the over financial reporting which led to the 2022, BPLC and BBPLC amended their consequences for remuneration Over-issuance of Securities, as well as respective annual reports on Form 20-F the work required to address the and for individuals? for the year ended 31 December 2021 to specific requirements of the SEC set out The Board Remuneration Committee has include restated financial statements for in its order of 29 September 2022. adjusted its remuneration decisions to this period reflecting the impact of the reflect the Over-issuance of Securities, What were the main financial Over-issuance of Securities. Such and in doing so has taken into consequences of the Over- amended annual reports on Form 20-F consideration the financial impact, also disclosed the existence of a material issuance of Securities? reputational impacts and how these weakness in internal control over financial In addition to a £0.2bn net attributable loss events reflect on the Group’s control reporting (as defined in the applicable SEC referable to the year ended 31 December environment. More detail can be found in rules) and management’s conclusions that 2021, Barclays has recognised a net the Remuneration report on page 201. BPLC’s and BBPLC’s internal control over attributable loss of £0.6bn in the year financial reporting and disclosure controls How does the Over-issuance of ended 31 December 2022 in relation to and procedures were not effective as at 31 Securities continue to impact the Over-issuance of Securities, materially December 2021. The material weakness in line with the anticipated financial impact Barclays? that had been identified related to a disclosed in BPLC’s and BBPLC’s H1 2022 The Group is engaged with, and weakness in controls over the results announcements. These amounts responding to inquiries and requests for identification of external regulatory limits represent the net attributable loss to information from, various other regulators related to securities issuance and Barclays in connection with the Over- and BBPLC and/or its affiliates is involved monitoring against these limits. issuance of Securities, taking into account in purported class action litigation in the costs of the rescission offer, the What remediation activity has relation to the Over-issuance of Securities. hedging arrangements entered into to been taken to address the The Group may face other potential manage the risks associated with the material weakness identified? private civil claims, class actions or other 1 rescission offer and the $200m (£165m ) enforcement actions in relation to the Since the identification of this material penalty paid following the resolution of the Over-issuance of Securities. Please see weakness, the Group has strengthened SEC’s investigation into the Over-issuance the internal controls relating to the Note 26 (Legal, competition and of Securities (see below for further detail). tracking of issuance programme limits regulatory matters) to the audited financial through the implementation and statements for the year ended 31 strengthening of a series of controls December 2022 for further information. across the Group, together with central governance. Accordingly, as at 31 Note: December 2022, management concluded 1 Exchange rate USD/GBP 1.22 as at 30 June 2022 that the previously disclosed material weakness in internal control had been resolved. Please see pages 194 to 195 for details on how this material weakness was remediated.