Saxo Bank, the Danish multi-asset brokerage, is bracing itself for the changes in EU regulatory policies (MiFID II) that will come into effect on January 3, 2018 by planning new solutions for introducing brokers (IBs). As of July 1, 2017, the firm will not be able to legally pay for inducing IBs offering discretionary portfolio management to clients or independent advice.
Saxo Bank is currently attempting to come up with a solution that will allow IBs to operate within specific boundaries, or exchange the existing model for one that will not require inducement fees.
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Danish regulations state that third-party companies are not allowed to keep or receive any kind of fees. The provision regarding independent advice and discretionary portfolio management includes: investing companies, banks, and investment management companies that are authorized as investing companies.
Other than the aforementioned instances, firms are allowed to receive or pay a commission or fee in regard to the provision of non-dependent investment services or ancillary services providers. Minor value payments are also acceptable, but in both cases a company must ensure that its goal is to improve customer service quality.
Regardless of the nature of the fee, the firm must maintain its duty of honesty, fairness, and professionalism in order to serve the best interests of its client base.
About a week ago, Finance Magnates reported on Saxo Bank’s having launched an extensive developer portal which delivers references, technical documentation, tools, and samples to customers. The incentive was to further enable use by the clients of the company’s OpenAPI ecosystem.