Saxo Bank has been cleared by Finanstilsynet (Danish FSA) of allegations of investor protection failures this week, following the results of an independent investigation by UK consulting firm, Oliver Wyman.
Back in July this year , the Danish FSA published a series of reports accusing Saxo Bank of failing to adequately protect investor interests following complaints from a handful of customers and speculation by the Danish media. An independent investigation was requested by the Danish FSA.
The Danish FSA published an official report on Monday, stating that following the independent investigation, it has “no cause to take any further action” against Saxo Bank.
The tests conducted by Oliver Wyman revealed no signs that Saxo Bank systematically priced its manual orders to the detriment of its clients, nor did it violate its own general business conditions and best execution policy. Furthermore, Oliver Wyman concluded that there is no evidence that individual clients were treated unfairly.
The report states only 0.1% of trade orders were to the detriment of clients but inexplicably so. Oliver Wyman says this is typical of similar studies. The Danish FSA says in the report (translated from Danish): “The study indentified the trading orders that are executed at prices that deviate from the expected, have been both favourable and to the detriment of customers, and that these favourable and unfavourable prices have broadly offset each other.”
The report does not comment on the accusations that Saxo’s platform, SaxoTrader did not comply with anti-money laundering protocol.
I should think the Danish FSA has come out of this investigation looking a little red faced. Its accusations in the first place were flimsy – which it almost admitted back in July when it said: “Since the press has raised uncertainty with regards to the bank’s integrity and loyal execution of customers orders, and since Finanstilsynet has received a complaint that the bank has conducted front-running or, in other ways, not executed customers orders in line with the bank’s own trading procedures or best execution policy, Finanstilsynet finds that there is a need to investigate the bank’s handling and execution of orders.”
The Danish banking community must hope that the Danish FSA will not succumb to media pressure again.
For Saxo, it is barely a triumph. After a year of having their reputation dragged through the Danish media, it has merely had confirmed what it knew already – that it did nothing wrong. A spokesman for the bank told theweeklyFiX: “For Saxo Bank it is good news. The results of the independent investigation are as expected, but, to outsiders, it’s a total acquittal.”
The Danish FSA was unavailable for comment.
