FSA reprimands Saxo Bank SNB handling

11 July, AtoZForex.com, Amsterdam — Ever since the drastic SNB Black Swan event on the 15th of January this year, there has been countless of firms being affected negatively. For some it meant insolvency and the need of lifelines, like the case for world dominant US based FXCM, while others has been damaged solely financially. Although it’s six months since the market turmoil, still post cases pop up every now and then. Adding to this list the Danish FSA regulator has over recently imposed Saxo Bank with two reprimands relating to the bank’s handling during the SNB incident.

In more detail, the Danish FSA has revealed to receive a total of 38 complaints in relation to the CHF incident against Saxo Bank. These depict to Saxo Bank’s: adjustment of the price settlement, client contact, marketing material, and policy to charge clients an amount that exceeds their margin deposit, all during the incident. On these counts, Saxo Bank A/S has been found guilty of violating a section of FSA’s local Executive Order on Investor Protection.

Considering, the bank has failed to give information upon limitations for when the “dedicated liquidity” applies. As Saxo Bank has erased this information from their website, it’s no wonder that the FSA reprimands Saxo Bank of providing inadequate information on its limitations for dedicated liquidity service.

Alongside this case, the FSA also criticize Saxo Bank lack of instantaneous handling of the SNB incident. The bank did not provide immediate information to clients about the difficulties of executing orders, for those who could not have their stop-loss executed due to the lack of liquidity in the market on the event of the SNB. This marked another count of violation, when assessing the Executive Order on Investor Protection.

In response to the FSA reprimands against the bank, Mr. Bjørn Krog Andersen, Saxo Bank’s Global Head of Legal & Compliance, has responded as follow: “We take notice that the FSA after a thorough investigation has stated that Saxo Bank’s handling of the events and the application of price adjustments has been consistent with the regulations on investor protection and that the Bank’s terms are not in conflict with the regulations that a financial intermediary must act honestly and professionally towards its clients.”

Concluding further, Mr. Bjørn Krog Andersen stated: “We acknowledge that the Danish FSA found reason to issue two reprimands. It is important for the Bank that its client communication is clear and effective and with regards to “dedicated liquidity” that potentially could lead to misunderstandings this has now been removed. With respect to the second reprimand on our communication with our clients, we will in a similar situation inform the relevant clients faster. Moreover, in general we find that the FSA’s investigation and subsequent conclusions give no reason to changes in the legal position of the Bank in relation to the affected clients who suffered losses as a result of the Swiss National Bank’s decision.”

Read also: OCC fines JPMorgan Chase

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