Danish Watchdog Reprimands Saxo Bank over SNB Crisis Handling

Almost six months have passed since the shock of Black Thursday hit the forex industry on January 15, 2015, and more repercussions still come to light ever so often. Today, it was revealed that Saxo Bank received two reprimands from the Danish FSA (Finanstilsynet) in relation to its handling of the CHF incident.

The Danish watchdog has received a total of 38 complaints against Saxo Bank, all attributable to the CHF incident. The complaints related to Saxo Bank’s adjustments of the settlement price, Saxo Bank's marketing material, bank/client contact during the incident and the option for Saxo Bank to charge clients an amount exceeding their margin deposit.

The Danish FSA finds that Saxo Bank A/S has violated a section of the local Executive Order on Investor Protection, having failed to provide information about limitations for when the so-called "dedicated Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term” applies. Saxo Bank has subsequently removed the information in question from its website. Therefore, the Danish FSA reprimands Saxo Bank for having marketed itself with incomplete information regarding limitations for the dedicated liquidity service.

The Danish watchdog also reprimands Saxo Bank for not immediately providing information about significant difficulties in executing client orders to clients who could not have their stop-loss orders executed because of the lack of liquidity in the market on January 15, 2015. This contradicts another section of the Executive Order on Investor Protection.

Bjørn Krog Andersen, Global Head of Legal & Compliance Compliance In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a Read this Term, Saxo Bank A/S, responded: “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.”

“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,” he concluded.