Professional client status: what it means for you

On 30 July 2018, ESMA introduced a number of changes to the way leveraged products, such as CFDs, are offered to retail clients

Introduced by the European Securities and Markets Authority (ESMA), these changes include:

Limits on the amount of leverage offered to retail traders

Restricted access to certain products

Negative balance protection

Apply for professional client status. Login, go to Account > Other > Classification and follow the steps.

These changes apply to all CFD, forex and spread betting providers, but don’t impact professional traders.

You may request to have your categorisation changed to elective professional so the restrictions won’t affect you. However, as an elective professional client, you’ll lose some regulatory protections that are in place for retail traders.

Please read the following information carefully and note the risks associated with reclassification.

Elective Professional Client Status Details

Protections you’ll keep

Protections you’ll waive

The Guarantee Fund
As an individual, you are eligible for protection from the Guarantee Fund for up to EUR 100,000 for cash deposits that you hold with us. Cash deposits are calculated as the net free deposit after deduction of any debt to the bank.

Leverage restrictions
Leverage restrictions that will apply to some of our products will not apply to professional clients. Remember with increased leverage comes increased risk. See leverage comparison here

Danish Complaint Board of Banking Services (Pengeinstitutankenævnet)
You should be eligible to use the Danish Complaint Board of Banking Services as long as you are ‘a natural person acting for the purposes outside of your trade, business or profession. You should contact them directly if you are unsure whether their services will apply to you.

Negative balance protection
We are not required to offer professional clients negative balance protection and therefore should your account fall into a negative balance, you are obliged to make additional payments – meaning you may incur losses exceeding your deposits.

Best execution
We have a general duty to act honestly, fairly, professionally and in the best interest of the client. In relation to order execution, we are required to take all reasonable steps to obtain the best possible results for clients on a consistent basis when executing client orders or when placing orders with, or transmitting orders to, a third party to execute.

Product restrictions
As you will demonstrate that you have the relevant experience and knowledge to understand the risks associated with trading complex financial products, we will not impose product restrictions on you.

Change in categorisation
You retain the right to request a different categorisation at any time – for example, if you wish to be afforded a higher level of regulatory protection.

Risk warnings
As you will demonstrate that you have the experience and knowledge to understand the risks associated with trading our products and we will not be required to provide you with any standardised risk warnings.

 

Communication
As you will demonstrate you have a firm understanding of our products, services and risks associated with them, we can communicate with you in a more sophisticated language.

We’ll always communicate in a clear, fair and not misleading way, regardless of client categorisation.

 

Professional Client vs Retail Client leverage comparison

Saxo professional clientsSaxo retail clients
FX (Majors)1.50%3.33%30:1
FX (Minors2.00%5.00%20:1
Index (Majors)2.50%5.00%20:1
Index (Minors)3.00%10.00%10:1
Gold3.00%5.00%20:1
CommodityFrom 4%From 10%10:1
Equity10.00%20.00%5:1
Apply for professional client status. Login, go to Account > Other > Classification and follow the steps.

Qualification criteria

To qualify for professional categorisation, you must have the necessary expertise, experience and knowledge to be capable of making your own investment decisions.

You will also need to satisfy at least two of the following three criteria outlined by ESMA, and provide us with the relevant supporting information:

Trading Experience

You must have carried out transactions, in significant size, in a relevant product with an average frequency of at least 10 per quarter during the previous four quarters (with Saxo and/or other providers).

Portfolio

The size of your investment portfolio (held with Saxo and/or other providers), defined as including cash deposits and financial instruments, exceeds EUR 500,000.

Trading Knowledge

You work or have worked in the financial sector for at least one year in a professional position that requires knowledge of relevant products.

Qualification criteria in detail

Trade size and volume:

You must have carried out transactions, in significant size, in a relevant product with an average frequency of at least 10 per quarter during the previous four quarters (with Saxo and/or other providers).

Relevant products include: CFDs / FX (Spot / Forwards / Options); Futures; Options; Leveraged Exchange Traded Products ; Warrants, Binary Options.

Significant size is deemed as a minimum notional value of, for example, €100,000 on forex, €50,000 on indices, €10,000 on single stock CFDs.

The average frequency of trades can be at one provider, or a combination of. We will ask you for scanned copies of statements for any trade activity outside of Saxo.

Size of portfolio

The size of your investment portfolio (held with Saxo and/or other providers), is defined as including cash deposits and financial instruments*, exceeds EUR 500,000.

Acceptable examples of an investment portfolio can include: cash savings, stock portfolio, trading accounts and mutual funds.

Unacceptable examples include: company pension, non-tradeable assets, property, luxury cars, jewellery.
If a portfolio is held outside of Saxo, we may ask you for scanned copies of statements from other providers.

Professional experience

You work or have worked in the financial sector for at least one year in a professional position that requires knowledge of relevant products.

We will ask you for details of your role and how it has provided you with sufficient knowledge and experience and may require you to provide evidence of this if necessary.

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15
2900
Hellerup
Denmark

International

Trade responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

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