Saxo Bank faces a DKK 313,000,000 (49.7 million) administrative fine from Denmark’s financial watchdog after supervisors flagged anti-money laundering weaknesses in its institutional operations.

The Danish Financial Supervisory Authority issued the fine after finding that Saxo Bank breached its regulations between 2021 and 2023.

“The administrative fine is based on the company's failure to comply with the requirements for obtaining information regarding the purpose and intended nature of a number of customer relationships, as well as compliance Compliance In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a Read this Term with the requirements for ongoing monitoring for White Label Clients,” the regulator mentioned in the official announcement, as translated to English.

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Systemic Deficiencies in Controls

The regulator concluded that the bank failed to obtain sufficient information about the purpose and intended nature of certain customer relationships, in particular those linked to white-label partners.

Under the white-label model, Saxo Bank provides its trading platform to partner institutions, whose clients then access markets through Saxo’s infrastructure.

Although the FSA did not identify specific cases or signs of money laundering, it concluded that the systemic deficiencies in controls justified a substantial response. The fine is framed as a reaction to risk management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term failures, not evidence of criminal activity.

Read more: Saxo Bank Fined €1.6 Million for Violations by Now-Merged BinckBank

According to the decision, an initial calculation pointed to a higher penalty, but the FSA applied a reduction after Saxo Bank actively cooperated with the investigation and took immediate steps to restore compliance.

Also this month, Hong Kong’s financial regulator reprimanded and fined the local unit of Saxo Bank HK$4 million (about US$514,000) for offering 32 crypto products intended only for professional investors to retail clients, a move that follows the bank’s closure of its Hong Kong office and subsequent shutdown of operations in the jurisdiction a year earlier.

Saxo Bank Speaks

Saxo Bank has accepted the administrative fine, signaling that it will not challenge the FSA’s conclusions. Chief executive and founder Kim Fournais said the bank has launched “a number of strategic and operational initiatives” and invested heavily to strengthen defenses against money laundering.

“Since the inspection in May 2023, Saxo Bank has taken a number of strategic and operational initiatives and invested significantly in the prevention of money laundering and terrorist financing, including improving processes, procedures and reporting in a wide range of areas. Compliance with all applicable laws, rules and regulations in the markets in which Saxo Bank operates is of the highest priority,” Fournais said.