Saxo Capital Markets Limited UK has officially announced that the company is leaving the the UK CFD and FX Association. The decision of the UK subsidiary of Saxo Bank is dictated by the company’s disagreement with the position of the industry body that has been created to establish a unified front in defending the interests of the industry.
According to the company, the UK Financial Conduct Authority’s position on providing access to margin products for retail clients is adequate. Saxo Capital Markets is outlining that the proposed caps on leverage and enhanced transparency are appropriate changes necessary to ensure the protection of client interests.
Kim Fournais Explains Saxo Bank’s Decision
Commenting on the matter, Kim Fournais, CEO and founder of Saxo Bank, said: “We have decided to no longer be a member of the UK CFD and FX Association because the association was not sufficiently reflecting our views and interests. Trading CFDs and FX instruments brings a number of advantages to retail investors that have previously been the preserve of larger financial institutions. However, trading these instruments also carries risks that should not be neglected and warrant high industry standards and firm and fair regulation.
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For the Saxo Bank group it is important that our interests are aligned with our clients’ interests. When our clients succeed, we succeed and to support that, we offer responsible levels of leverage, risk education and relevant information to clients. The Saxo Bank group supports efforts from regulators to set higher standards in the industry and the underlying aim of ensuring better protection of clients and better alignment between the interests of clients and their facilitators.”
Fournais also outlined in the official commentary that the company is favoring a prudent approach to leverage and welcomes the proposals from the FCA to set responsible boundaries on leverage. Fornais elaborates that the levels proposed by the FCA are “roughly in line” with the maximum leverage which is already used by the company’s active trading clients.
“Trading with excessive leverage leads to a significant risk of frequent stop-outs which leads to client losses. We have no interest in offering clients too high leverage just to see clients being stopped out,” Kim Fournais concluded.