Client Money and TOCM
How is client money held and invested by Saxo Capital Markets?
Saxo Capital Markets holds client money in a ‘pooled’ client segregated trust account, a portion of the client money is invested in a term deposit which is also designated as a client segregated trust account. All Saxo Capital Markets’ client segregated trust accounts are held at an Australian ADI (Authorised Deposit-taking Institution), and are in compliance with Australian client money laws and regulations.
Will Saxo Capital Markets use Client A’s profits sitting in the client segregated trust account, to cover the margin obligations or deficit balances of Client B?
No, Saxo Capital Markets will not use Client A’s profits held in the client segregated trust account, to meet the margin obligation of Client B, or even the deficit balance of Client C. To ensure this, daily reconciliation is performed by back office to verify adequate funds always remain in client segregated trust accounts.
Does Saxo Capital Markets use client money held in the client segregated trust account to hedge its own positions?
No, Saxo Capital Markets does not use client money held in the client segregated trust account to hedge clients positions.
Does Saxo Capital Markets withdraw required margin deposit out of the client segregated trust account while a client maintains his/her open position?
Required margin deposited by clients, physically remain in the client segregated trust account while clients maintain their existing margined positions. Certain brokers may be entitled to withdrawal required margin deposits funded by clients, into their ‘house’ account, while clients hold their existing margined positions, funds should be returned once the client has exited out of their existing margined positions.
At what point is Saxo Capital Markets entitled to move funds held or invested in the client segregated trust accounts to their own Saxo Capital Markets ‘house’ bank account?
Situations when funds are withdrawn from the client segregated trust account and transferred to Saxo Capital Markets ‘house’ account, are situations when those funds are no longer considered client money. This may include, but not limited to situations where the client realises his/her losses; is charged commission, interest and/or financing rates; other similar fees and charges; or as permitted under the Corporations Act (Cth) 2001.
- Saxo Capital Markets does not at any point associate or mingle its own funds with client money held or invested in client segregated trust accounts, and vice-versa.
- Saxo Capital Markets client segregated trust accounts are all held and maintained in Australia, at no point does client money leave the Australian jurisdiction.
- Saxo Capital Markets parent company, Saxo Bank A/S headquartered and regulated in Denmark, do not have the power, access and control to withdraw client money out of client segregated trust accounts.
- To understand the counterparty risk associated with client money, refer to Saxo Capital Markets Combined FSG & PDS under counterparty risks for client money.
TOCM (Transparency of Client Money)
What is TOCM?
TOCM is a quarterly review on aggregated client money statements and client segregated trust accounts held with Saxo Capital Markets, conducted by a ‘Big 4’ audit firm, and delivered to all of Saxo Capital Markets’ clients.
The scope of the auditors review is based on the following;
- Audit of internal controls and procedures in respect to Saxo Capital Markets’ handling of client monies;
- Audit of physical cash deposited with Australian Authorised Deposit-taking Institutional (ADI);
- Reconciliation of balance in clients’ trading accounts and the segregated trust bank accounts.
The report provided by Saxo Capital Markets auditors will include an overview of Saxo Capital Markets’ responsibilities for client money, the auditors responsibilities and inherent limitations and last but not least a very clear and concise conclusion of the review. The report is delivered to Saxo Capital Markets clients on a quarterly basis.
What is Saxo Capital Markets’ motive behind TOCM, and why is it important?
Integrity and honesty are Saxo Capital Markets' core organisational values. TOCM is simply another step towards providing its clients comfort, and confidence in their preferred online broker. Saxo Capital Markets believe investors are entitled to know that their funds are where they say they are; TOCM empowers Saxo Capital Markets clients with this advantage.
By offering TOCM, a regular and independent 3rd party opinion on the transparency and visibility of client funds, Saxo Capital Markets aim to give its clients the confidence and assurance that no other Australian Financial Services License (AFSL) holder currently offers.
Finally, Saxo Capital Markets is the ‘first mover’ on Transparency of Client Money. Saxo Capital Markets hope that other brokers will join in on this initiative to restore and improve investors’ general confidence to the industry,
If you have any further questions regarding client money or TOCM, please feel free to speak to one of Saxo Capital Markets representatives. +61 2 8267 9000.