A report by Bloomberg earlier today has suggested that the Danish bank is considering to reverse the raise in margin payments, following its discouraging February trading volumes, the lowest recorded in the past two years.
However, speaking with Forex Magnates a company spokesman has made it clear that the report is incorrect, and the bank does not mull over such a step.
Back in late January, it was revealed in a filing made through the Irish Stock Exchange that Saxo Bank faced up to $107 million in losses following the Swiss National Bank’s move and subsequent volatility.
In February, Saxo Bank applied a wave of minimum margin requirements, following an initial across-the-board increase of margins back on January 21. This included margin changes on the Australian dollar (AUD), Canadian dollar (CAD) and New Zealand dollar (NZD), which were all raised to 3% from 2%, as well as the Chinese yuan moving from a 5% margin minimum to 20%.
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These moves came to a crescendo last week, when Saxo Bank reported its February 2015 volumes, which materially declined when compared to the first month of the year. The average daily trading volume (ADV) slumped by 37% to $9.0 billion.
Clients in Focus
Saxo Bank has also been facing a litany of complaints from clients surrounding the prices of Swiss franc trades back on January 15, 2015. The Danish bank has since defended its decision to adjust prices on CHF trades, stating the scenario as unavoidable given the extreme liquidity shortage immediately following the Swiss National Bank’s decision to abandon its euro peg.
As a result, Saxo Bank has received a letter from Danish Law Firm Andersen and Partners demanding that it reverse its decision to reprice franc trades or face a legal challenge.