According to a company announcement distributed to clients, Saxo Bank will introduce an amendment to its custody fees structure starting from January 1st, 2015. Clients holding stocks, ETFs/ETCs or bonds positions will have to pay a custody fee totaling 0.12% of the aggregate value of the client’s holdings per annum.
Saxo Bank has also introduced a minimum monthly fee totaling €5 ($6.25) plus Value Added Tax (VAT). The fee will be calculated on a daily basis and customers’ accounts will be charged on a monthly basis.
As a standard practice, companies involved in the holding of securities for safekeeping charge a custodian fee. While puntis argue that nowadays, since there is no physical safekeeping of securities at pretty much any brokerage, electronic safe keeping can also be a costly business.
As a regulated banking institution Saxo Bank is fully liable for holding custody of a customer's securities.
Back in 2011, Citi Global Transaction Services was awarded by Saxo Bank to provide global custody services for cash equities and fixed income instruments traded globally by the Danish company's clients, including the provision of Settlement , safekeeping and assets servicing.
For clients based in the EU, they will have to pay an additional VAT tax on top of their custody fees. For physical persons residing in the EU, the Danish VAT rate of 25% will apply. For corporations which are based in Denmark, the same rate will apply, while those who are incorporated outside of the EU, they will have to provide their EU VAT ID in order to waive the tax.
For individuals and companies outside of the EU no VAT will be added by Saxo Bank to their custody fees.
