Danish multi-asset brokerage Saxo Bank is further solidifying its position when it comes to the handling of the Swiss franc crisis in January 2015. The company has now been cleared of any wrongdoing by a third Danish authority.
The Danish Complaint Board of Banking Services (Pengeinstitutankenaevnet) has announced that the company handled the Swiss National Bank situation properly. The complaint submitted to the authority was related to the resettlement of a stop loss order to a lower level.
A longtime Greek client of the firm submitted a complaint which was reviewed, warranting no further action. The client has agreed to the terms and conditions which contain a risk disclosure statement and is therefore fully liable for his loss of around £70,000.
Client Trade Details
On January 15th 2015, the client held a position in the EUR/CHF pair with a stop-loss order associated with the transaction set at 1.1960. With the sudden rise of the Swiss franc the position was closed at 9:30 GMT at a settlement rate which was roughly the same as the stop-loss price.
Less than an hour and a half later, at 10:52 GMT, Saxo Bank sent an email to affected clients outlining that customers who were affected by the sudden increase in CHF should expect changes to settlement prices.
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With the login of the client into the platform at 18:44 GMT, the client front-end automatically generated the real settlement rate, which in this case was 0.9625. Due to the substantial difference, the client incurred a significantly greater loss than expected.
Third Danish Authority Clears Saxo Bank
After 2015, the Danish FSA issued an opinion that a clarification on the matter of handling the complaints should be issued by the Danish Complaint Board of Banking Services. The decision could also have EU-wide implications, due to the creation of a legal precedent.
Back in 2015 the Danish FSA stated that the the resettlement method used by Saxo Bank was not in conflict with the regulations that “a securities dealer must act honestly and professionally”.
Commenting to Finance Magnates, the CFO of Saxo Bank, Steen Blafaalk, said: “We now have conclusions on the matter from three relevant authorities in Saxo Bank’s favor. The conclusions are in line with our expectations and help set the direction for remaining court cases.”
“The Danish Complaint Board of Banking Services concluded in Saxo Bank’s favor saying that Saxo Bank had acted in a way that was fair and correct, and in accordance with the bank’s general terms of business. The board further concluded that the corrected prices contributed to reach the, under the circumstances, best results for clients,” Blafaalk explained.