Saxo Bank welcomes ESMA’s measures in relation to margin trading
Saxo Bank, the leading fintech specialist focused on multi-asset trading and investing, strongly welcomes ESMA’s recently announced measures in relation to the provision of CFDs to retail clients. The measures include caps on leverage which Saxo Bank considers fair and proportionate. Saxo Bank expects these measures to be positive for clients and result in a more level playing field among EU providers offering margin trading, which will in turn move the competitive focus away from leverage and towards the quality of platform, price, product and service.
Commenting on ESMA’s measures, Kim Fournais, founder and CEO, Saxo Bank, said:
“Saxo strongly welcomes and supports the measures set forth by ESMA and believes that consistent, harmonised regulation at a European level will be positive for clients and the industry as a whole. Through these measures, ESMA is creating better alignment between leverage levels and market conditions which is very important and we find the proposed caps on leverage fair and proportionate.
We have made a clear strategic decision not to compete on high leverage which puts us in a good position to maintain and grow our business in this new regulatory environment.
CFDs and FX instruments have a number of uses for traders, such as allowing them to trade the full global macro cycle and hedge their market exposure in a flexible and efficient way. However, with excessive leverage, the risks of trading these products can outweigh the benefits. It is important to note that this is a leverage problem – not a product problem. Responsible caps on leverage are therefore key to consumer protection.
Our approach and business model clearly show that running a profitable business and being a responsible market participant are not mutually exclusive. For the benefit of its long-term survival, the industry should welcome the move away from competition on leverage and embrace competition on quality of platform, price, product and service”
“Some argue that more prudent consumer protection will lead to increased activity from unlicensed providers from outside of the EU. Such activities should be the remit of the police and relevant authorities. This is however an entirely separate issue and not in, our opinion, a valid argument against firm and fair regulation” added Fournais.
As one of the first signatories of the FX Global Code of Conduct in 2017, Saxo Bank also decided to publish an Enhanced Disclosure and withdraw from the UK CFD and Association. Saxo Bank’s aim is to continuously be at the forefront of driving transparency, integrity and trust in the sector.
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 www.home.saxo.