Saxo Bank fulfils its regulatory capital requirements
In light of the recent volatile Swiss Franc currency movements, we would like to inform you that Saxo Bank and its subsidiaries are well positioned financially to conduct our on-going businesses globally.
Saxo Bank A/S is a European regulated bank and we meet the regulatory capital requirements according to European Banking Authority and Danish Financial Services Authority. The capital requirements for regulated banks are higher than those of most brokerages who are not regulated as banks.
A number of Saxo Bank’s customers ended up with insufficient margin collateral to cover their losses on positions in Swiss Franc. Saxo Bank is liaising with these clients to settle such unsecured amounts. It is expected that some customers will not be able to the settle the balance in full and that the bank will incur losses in this respect.
However, even in the unlikely event that Saxo Bank would not be able to recover any of the outstanding amounts, Saxo Bank would still fulfil its regulatory capital requirements.
Part of the reason that we have successfully protected our financial strength is our robust and pre-emptive risk management approach. Having identified the growing risks inherent in CHF trades, we raised margin requirements for CHF in Sep 2014 from 4% to 8%, translating to a leverage change from 25x to 12.5x. This naturally deleveraged our client positions and lowered the financial impact of the CHF move to our client portfolios collectively.
Saxo Bank generally only holds very small, immaterial proprietary positions – including to CHF, and Saxo did not incur any net losses on proprietary trading during this event.
Please see the official news releases from our website below regarding:
Saxo Bank is a leading Fintech specialist and global multi-asset facilitator of capital markets products and services. Saxo enables private clients to trade more than 35,000 instruments from one single margin account.
Additionally, Saxo provides institutional clients such as banks and fintechs with Open Banking solutions from multi-asset execution, prime brokerage services to trading technology. Founded in 1992, Saxo Bank has embraced Open Banking from the beginning and is focused on helping clients and partners through win-win partnerships and product innovation.
Since launching its first online trading platform in 1998, Saxo Bank works to empower everyone to navigate their financial future by opening up access to trading and investment. The Saxo Group’s client assets total more than 45 billion euros, and the Group employs more than 2100 people in financial centres around the world including London, Singapore, Amsterdam, Shanghai, Hong Kong, Paris, Zurich, Dubai and Tokyo.For more information, please visit http://www.home.saxo.