Citi tech tweaks halt UK online ETF purchases
Citigroup has halted the online purchase of exchange traded funds for UK customers pending system enhancements, the latest in a string of technology issues to affect the US bank’s business.
Over the weekend customers holding wealth management accounts were informed they could no longer make purchases of low-cost funds online for “operational reasons”, according to a client notice seen by the Financial Times.
Instead clients will have to place orders over the phone with a relationship manager. The suspension is due to a system enhancement and mainly affects clients in the UK, according to a person briefed on the suspension.
Citi declined to comment.
The halt further underscores the tech overhaul under way at Citi following a series of hitches across its business, from wealth management to payments and trading.
A Citi trader last month made erroneous trades on European stocks, a move later blamed for causing a mini flash crash. In the summer of 2020, a so-called fat finger error resulted in a $900mn loan being paid back to lenders of Citi’s client Revlon, instead of the intended interest payment of less than $8mn.
The Financial Times reported this month that Citi also suffered a tech glitch at the height of the market panic at the start of the coronavirus pandemic that left it relying on the grace of an exchange clearing house to prevent it from defaulting on margin payments for derivatives contracts.
To fix the problems chief executive Jane Fraser has earmarked $11bn for tech spending in 2022, one of the banking industry’s biggest budgets.
ETFs that offer exposure to the US stock markets are among the most popular purchases for retail investors, who are attracted to their low costs. They mostly track the big indices such as the S&P 500 and the Nasdaq 100, and the industry is nearing $10tn in assets under management.