Saxo Capital Markets Menkul Değerler A/Ş, the group’s Turkish subsidiary, has scaled back its operations, opting to close down its Istanbul office. The decision follows on the heels of the recent shakeup in Turkey’s foreign exchange market and reflects a recalibration of Saxo Bank’s focus in the country. Moving forward, Saxo Bank will instead look to leverage its product distribution through other relationships in the region.
Back in February, the Capital Markets Board (CMB) of Turkey announced sweeping changes to its FX regulations, including the imposition of a maximum leverage on forex trading accounts to 1:10. Additionally, the size of the minimum deposit amount when opening an FX trading account was also altered, increasing the barrier of entry into the market. The official stance by the regulator was that if clients could not deposit at least TRY 50,000 (approximately $14,300) then they should not be trading on the forex market.
Saxo Bank has begun to rethink its operations in Turkey entirely – the group has decided to diversify its retail business. While Saxo Capital Markets Menkul Değerler A/Ş will continue to operate domestically, it will instead explore partnerships with other regional groups.
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Matteo Cassina, Global Head of Sales, commented: “We have decided to close our office in Istanbul to focus on very strong existing partners in the region. Setting up an office in Istanbul has been instrumental to achieve a wide distribution of our products via some of the most prestigious local financial institutions.”
“Closing the office will enable us to reduce overall cost and complexity and re-set our ambitions on which countries we do direct retail business in and which we target via strategic partnerships,” he added.
Saxo Bank’s closure of its Istanbul office also follows a similar move by XTB last month, which also exited the Turkish FX market. The Polish brokerage announced its departure from the Turkish market in May, formally withdrawing its registration with the CMB in what it described as ‘drastic changes to the regulatory structure’.
Indeed, Turkey’s brute force FX regulations in 2017, in conjunction with economic and political upheaval in the country, have served as driving forces pushing brokers out of the country.