Saxo Bank
Encyclopedia
Saxo Bank is an online Danish investment bank. It was founded as a brokerage firm in 1992, under the name Midas Fondsmæglerselskab, by Lars Seier Christensen, Kim Fournais and Marc Hauschildt. The name was changed to Saxo when the company obtained a banking license
in 2001. Saxo offers trading through its online platform SaxoTrader in Forex, Stocks
, CFDs
, Futures
, Funds
and Bonds
. Private Wealth Management services are also offered. According to Saxo, roughly two-thirds of the its activities are derived from partnerships with institutional trading partners. The company functions as an online broker with a bank license, without offering traditional banking products.
Internationally, Saxo Bank is known for its success in Internet brokerage and has received a number of awards. Domestically the bank is also known for its two founders who are often outspoken on Danish politics. Following a record income and profit in 2008, the bank's net profit ended at DKK 201 million in 2009 with 80% earned in the second half of the year.
In August 2010, the bank's half-year results revealed a net profit of 551 million DKK, which is more than any other full year results in Saxo Bank’s history. Following the half-year results, rumours emerged that part of the bank is up for sale. Following its record 2010 results, Saxo Bank holds a market value of about 20 billion DKK, according to media reports.
Since late 2010, Saxo Bank has launched several joint White Label solutions with industry giants such as Microsoft
, Barclays Stockbrokers Ltd., the financial services company, and TD Waterhouse
, UK's leading execution-only brokers.
at the time while Fournais worked at the now defunct Lannung Bank. The two said that they both felt like they had found their business soul mate.
Midas initially operated as a broker selling option products without obtaining the required licenses. When the company acquired its license, the periodical Økonomisk Ugebrev, Economic Weekly began publishing an article series on sidegadevekslererne, the bucket shop
s of Denmark, and included Midas.
During the autumn of 1996 well-known Danish business man Karsten Ree claimed he had been cheated by Midas into making fictive investments via their wealth management services, suffering losses in excess of 800.000 DKK in one month. The company subsequently underwent a criminal investigation by the Director of Public Prosecutions but was cleared of all charges.
, because there was already a Nigeria
n bank called Mida operating at an international level. Saxo obtained its new banking license in 2001, began expanding its online presence and moved to new headquarters in the Copenhagen suburb of Gentofte
.
Saxo Bank also decided to outsource work on their new software to a Russian company, Reksoft
, which worked on the software from August 2003 to December 2006.
In March 2004, Saxo Bank had to halt its business in Australia because the Australian Securities and Investments Commission
(ASIC) passed regulation requiring an Australian bank license to offer foreign exchange to private customers. Saxo had to terminate all its Australian retail clients and passed the accounts to two Australian institutional clients. Saxo had particular problems with the Australian authorities, as Danish legislation did not allow the country's regulator to sign a bilateral agreement with them. On 17 September, the issue was resolved, and ASIC granted Saxo a license to trade in Australia. Since then Saxo has also mainly focussed on institutional solutions in the Oceanian countries and territories.
In 2005, it won FXweek's e-FX Award, in the category Best Retail Platform and reported a 39% increase in pre-tax profits, while net profits rose DKK 161 million (EUR 21.6 million) to DKK 223 million. In 2006, Saxo expanding its presence primarily through white label clients and made changes to its structure, seeking to boost its retail forex with hires from the Danish business world. Internal restructuring took place and Lars Seier Christensen said the changes were made to reflect growth.
Eric Rylberg, as new Chief Operating Director, and Karsten Poulsen as his Deputy. The founders retained their executive titles. Shortly after, Rylberg and Poulsen implemented a rationalisation plan, reducing staff by around 1/3.
Saxo has since been growing through add-on acquisitions and startups, and has built an asset management department, Saxo Asset Management, legally segregated from the rest of the Bank, through acquisitions. In 2009, Saxo acquired Sirius Kapitalforvaltning and in June 2009, it purchased the full share capital of Capital Four Management Fondsmaeglerselskab A/S and 51% of the share capital of Global Evolution Fondsmaeglerselskab A/S, providing expertise for Danish bond & equity instruments. According to its annual results for 2009, Saxo Asset Management grew assets under management from DKK 10 DKK billion to more than DKK 20 billion by the end of 2009 and another 25% in Q1 2010 to DKK 25 billion. A special report on Danish HNW clients in the New York Times said that by July 2010, Saxo Asset Management handles 29 billion kroner in assets, 15.5 billion of which comes from ultra-high-net-worth clients.
Following a minority stake purchase in EuroInvestor, a Danish investment portal, in 2009, Saxo said it would speed up development of its trading systems by acquirering a 40% stake in Initto, a software company based in India and Ukraine and in 2010 it launched an equity profile incorporating elements from EuroInvestor. In July 2010, Saxo Bank increased its equity interest in EuroInvestor to 41%.
On 4 December 2009, TV2 (Denmark)'s financial news disclosed that the founders of Saxo was announcing to E*TRADE's Swedish and Danish employees that Saxo had entered into an agreement to acquire E*TRADE International’s local Nordic online trading business and online bank from E*TRADE Nordic AB, an indirect subsidiary of US-based E*TRADE FINANCIAL Corporation. In an interview with Dagens Industri, Lars Seier Christensen said that following regulatory approval Saxo Bank will have full banking license in Sweden. He also told its asset under management will increase by more than SEK 6.0bn and adds an additional 50,000 active accounts. E*TRADE's Nordic business also includes client accounts in the baltic region. According to other reports Saxo will now be able to offer pension products, stock and margin accounts, bond offerings and Funds Supermarket. Following a record year in 2008, net profit ended at DKK 201 million in 2009 with 80% earned in the second half of 2009.
On 6 October 2008, during the Financial Crisis, Saxo decided to join the Danish Sector Fund (Det Private Beredskab), and was as such encompassed by the two-year guarantee for deposits with Danish financial institutions. Saxo Bank declined to participate in the Government
's Credit Package, saying it would lose money if it received capital from the state-funded Credit Package. On 24 March 2010, a majority in the Danish Parliament agreed on a new guarantee scheme, which would bring deposit guarantees into line with European Union rules. The new scheme takes effect from 1 October 2010. Like all other Danish banks, Saxo Bank is covered by the scheme.
Saxo Bank was later named the Best White Label Solution Provider in the world, at the World Finance Foreign Exchange Awards 2010, citing "the Bank's long established program of investment and innovation within its White Label business".. In the same month the bank was also awarded Best re-labelling platform for 2010 by industry magazine Profit & Loss. Saxo was voted into the top spot by subscribers to represent 'reader's choice'.
In July, 2010, CEO Kim Fournais stated that the bank's 2009 turnover of 70 billion DKK on a daily basis had been broken, despite negative press at the start of the year. The growth is believed partly to spring from an explosive growth in Saxo Bank's largest partner, Citi, whose turnover resulting from trading grew nearly 500% in the first 6 months of 2010. In August, 2010, the Bank's half-year results revealed that net profit had indeed increased 13-fold from 41 million DKK to 551 million DKK, making the first six months of 2010 better than any other full year in Saxo Bank's history.
On 17 September, 2010, Saxo Bank announced plans to invest 59 million DKK in Brorup Sparekasse; a small Danish savings bank founded in 1897 with seven branches. The bank also said that it intended to offer at least 150 million DKK more in capital contribution when the terms for transforming the Brorup Sparekasse into a joint-stock company were fulfilled. Brorup Sparekasse ran into difficulties in 2008 and 2009, primarily due to failed speculation in unlisted bonds, which led to 2009 negative revenue of 74 million DKK before tax. Saxo Bank later announced that the terms for transforming Brorup Sparekasse into a joint-stock company were fulfilled with Saxo Bank as the largest shareholder owing 98,6%
In November, 2010, Saxo Bank launched an online equity platform with Microsoft
. The personal MSN Trader - Powered by Saxo Bank allows individual investors to trade 11,000 shares on 23 exchanges globally "in combination with functionalities which were previously available to professional investors only". These include in-depth research such as being able quickly to compare investment opportunities in a company with its peers in the same sector. The platform was tailor-made for the MSN audience, featured on MSN Money
. It is said to mark one of the most significant deals in Saxo Bank's history.
In its 2010 results, Saxo Bank proved to have grown way beyond industry averages with profits trebling compared to 2009, but it also revealed that it had launched another online platform this time with Barclays Stockbrokers Ltd. to supply their UK client base with an International Equities solution. The solution, which goes under the name International Trader, encompasses over 9,000 equities, 21 major global exchanges in 13 international markets and an Equities research solution. The release were already being marketed widely in the UK marketplace as well as to Barclays' existing UK clients base. In May, 2011, Saxo Bank furthermore announced it would provide TD Waterhouse
, the UK's leading execution only broker, with an online derivatives trading platform for retail investors.
, Copenhagen
, Denmark
, was launched offering banking services and advice to retail clients. Saxo Bank said that the newly opened branch will align its efforts with the specific wishes and needs of the clients and targets its offers towards clients who have their finances under control. According to a spokeperson from the Bank, Saxo Privatbank will in due time be represented in a string of the bigger Danish cities.
Saxo Bank tightened and standardised the pricing of foreign exchange options on its retail trading platform, SaxoTrader in a bid to boost transparency and attract more investors to the market. In an upgrade that went live in mid-May, the Bank improved spreads on FX options for all 40 of its currency pairs, with the new prices streamed to SaxoTrader. The tightening of spreads was applied to all existing and new clients, and was accompanied by an account standardisation process. Clients can now choose a classic, premium or platinum account, each with different spread levels and qualification criteria.
Furthermore, Markit announced that Saxo Bank would become the first financial institution to report its CFDs on Single Stock trades on a voluntary basis, in a bid to bring greater transparency to this fast growing market.
In order to attract more flow from high-frequency traders, Saxo Bank launched ForexTrading.com, a retail foreign exchange platform. Liquidity comes from the same 12 tier-one banks as for the Bank's SaxoTrader platform but the new service has a slimline offering, variable spreads, a low initial deposit of $2,000 and is serviced in English only.
, was designed by Danish architects 3XN
, and is owned by Carlsberg Properties. The façade of the building is covered in diagonal white aluminium and blue glass patterns. In June 2010, Danish business newspaper
, Borsen, named the Saxo headquarters the "Kingdom's finest domicile"
Other Saxo Bank offices are located in Australia, the Czech Republic, Dubai, France, Greece, Hong Kong, Italy, Japan, Netherlands, Singapore, Spain, Switzerland and the United Kingdom.
with co-founders Kim Fournais and Lars Seier Christensen holding majority stakes. Private Equity firm General Atlantic
bought a minority stake in June 2005, for which the CEOs received more than $30 million each.. According to the 2009 annual report, Fournais Holding A/S and Lars Seier Christensen Holding A/S today own 30% each of the Bank. General Atlantic owns 22% of the Bank and Espirito Santo
Financial Group (Portugal’s third biggest financial group) with its subsidiary Banco Espirito Santo Group together hold 9.9% of the Bank’s shares, after taking a five percent stake in Saxo in 2008. The remaining interest is mainly held by a number of current and former employees of Saxo Bank.
According to Saxo representatives, so-called White Label Partnerships accounts for more than half of the bank's revenue providing re-distribution of the bank's platform to a broader public through partnerships. Private Wealth Management is a relatively new area of business.
as Team CSC Saxo Bank. Carlos Sastre
won the Tour, and the team took the team classification. In 2009 and 2010, Andy Schleck
finished the Tour in second place. When the bank signed the sponsorship agreement with Riis Cycling A/S, it noted that the team “has the international reach and name recognition that means we will be able to get our message our to most of our client groups around the globe. We love the sport, and believe that together we will be winners.”. While the bank announced in January 2010 that it would not extend its sponsorship beyond 2010, it surprised everyone Lars Seier Christensen together with Bjarne Riis
announced to the public on 3 August 2010 that Saxo Bank had extended its sponsorship of Riis Cycling for another year, and that Tour winner Alberto Contador
had signed onto the team, with the aim of winning all Grand Tours
(the Tour de France
, the Giro d'Italia
and the Vuelta a España
) in one year.
Saxo is a sponsor of 'CEPOS University', the company also pays for reprinting and distributing several books Denmark; including Ayn Rand
's novel Atlas Shrugged
, which the bank had retranslated into Danish and distributed 10,000 copies (each new employee of the bank receives a copy). In May 2007, Saxo Bank donated one million DKK to the centre-right party Ny Alliance (later theLiberal Alliance), CEO Lars Christensen later joined the party himself.
In May, a Lebanese investor said his company had lost 20 million DKK in four months because of unstable pricing and error interruptions on the SaxoTrader. Saxo Bank rejected that errors are a common thing and claimed that the SaxoTrader has an uptime of 100%
J. Korsoe Jensen, Attorney at Law for Saxo, issued lawsuits against the two former clients in June, 2010, for false accusations.
The new Chairman of the Board of Saxo Bank, Kurt Larsen, admitted to Berlingske Tidende that the lawsuits filed against the two former clients were indeed very unusual measures. However, he also said:
completed their investigation of Saxo Bank, having analysed its trading platform and protection of investors. The Danish FSA found its automated trading system sufficiently transparent to users. Furthermore, the FSA found no remarks vis-à-vis the bank's service regarding of trading tips on the platform, the technical structure of the system or its robustness. Likewise, the Danish FSA concluded that the evaluation version of Saxo Bank's trader would permit possible clients to experience dealing with trading complex products without risk before they became customers for real.
However, the Danish FSA ordered an independent investigation of whether trades executed manually and performed on the Bank's electronic trading system are generally being executed in accordance with the Bank's common trading conditions and Best Execution Policy. In late August, it was announced by the Danish FSA that the investigation would be done by Oliver Wyman
, the international consulting company.
The independent investigation is said to have cost Saxo Bank millions and were two months overdue when on 29 November, 2010, the Danish FSA published a statement, saying that Oliver Wyman had concluded that "Saxo Bank was not systematically mispricing its manual order flow to the detriment of its clients or in violation of its General Business Terms and its Best Execution Policy" and "that it could find no evidence of clients being systematically unfairly treated at the individual level". Based on the above mentioned conclusions, the Danish FSA found that the investigation by Oliver Wyman did not give cause for pursuing anything further regarding Saxo Bank's execution of manually executed trading orders nor regarding Saxo Bank's trading system. The statement also said that the instruments represented in the cases covered by the Danish media, this summer, and the client complaints received by the Danish FSA had been taken into account.
The WeeklyFix column suggested that the Danish FSA had been pressured to act on Saxo by press reports. "There is no doubt the Danish FSA has felt under pressure to act (...) This begs the question, since when did financial authorities spring into action on the back of media speculation?"
Banking license
Under most jurisdictions, a banking license is a prerequisite for a financial institution that wants to provide banking services, such as taking deposits from the general public....
in 2001. Saxo offers trading through its online platform SaxoTrader in Forex, Stocks
Stocks
Stocks are devices used in the medieval and colonial American times as a form of physical punishment involving public humiliation. The stocks partially immobilized its victims and they were often exposed in a public place such as the site of a market to the scorn of those who passed by...
, CFDs
Contract for difference
In finance, a contract for difference is a contract between two parties, typically described as "buyer" and "seller", stipulating that the buyer will pay to the seller the difference between the current value of an asset and its value at contract time...
, Futures
Futures contract
In finance, a futures contract is a standardized contract between two parties to exchange a specified asset of standardized quantity and quality for a price agreed today with delivery occurring at a specified future date, the delivery date. The contracts are traded on a futures exchange...
, Funds
Collective investment scheme
A collective investment scheme is a way of investing money alongside other investors in order to benefit from the inherent advantages of working as part of a group...
and Bonds
Bond (finance)
In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...
. Private Wealth Management services are also offered. According to Saxo, roughly two-thirds of the its activities are derived from partnerships with institutional trading partners. The company functions as an online broker with a bank license, without offering traditional banking products.
Internationally, Saxo Bank is known for its success in Internet brokerage and has received a number of awards. Domestically the bank is also known for its two founders who are often outspoken on Danish politics. Following a record income and profit in 2008, the bank's net profit ended at DKK 201 million in 2009 with 80% earned in the second half of the year.
In August 2010, the bank's half-year results revealed a net profit of 551 million DKK, which is more than any other full year results in Saxo Bank’s history. Following the half-year results, rumours emerged that part of the bank is up for sale. Following its record 2010 results, Saxo Bank holds a market value of about 20 billion DKK, according to media reports.
Since late 2010, Saxo Bank has launched several joint White Label solutions with industry giants such as Microsoft
Microsoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...
, Barclays Stockbrokers Ltd., the financial services company, and TD Waterhouse
TD Waterhouse
TD Waterhouse is the brand used for both Canadian and British brokerages within the TD Bank Financial Group. It was also formerly used for TD's American brokerage....
, UK's leading execution-only brokers.
1990s: Midas Fondsmæglerselskab
Lars Seier Christensen and Kim Fournais formed Midas Fondsmæglerselskab after meeting in London in the early 1990s. Christensen was working as a broker for Gerald MetalsMF Global
MF Global , formerly known as Man Financial, was a major global financial derivatives broker. MF Global provided exchange-traded derivatives, such as futures and options as well as over-the-counter products such as contracts for difference , foreign exchange and spread betting. MF Global was...
at the time while Fournais worked at the now defunct Lannung Bank. The two said that they both felt like they had found their business soul mate.
Midas initially operated as a broker selling option products without obtaining the required licenses. When the company acquired its license, the periodical Økonomisk Ugebrev, Economic Weekly began publishing an article series on sidegadevekslererne, the bucket shop
Bucket shop
Bucket shop refers to a particular type of fraudulent business:* Bucket shop * Bucket shop The term is used as a pejorative colloquialism to refer to different kinds of businesses, indicating that the speaker believes it is a fraud or scam...
s of Denmark, and included Midas.
During the autumn of 1996 well-known Danish business man Karsten Ree claimed he had been cheated by Midas into making fictive investments via their wealth management services, suffering losses in excess of 800.000 DKK in one month. The company subsequently underwent a criminal investigation by the Director of Public Prosecutions but was cleared of all charges.
2000s: Name change
In 1997 Midas launched its first internet product; a trading platform for currencies called MITS (later replaced by SaxoTrader). The company renamed to Saxo Bank, named after the Danish Saxo GrammaticusSaxo Grammaticus
Saxo Grammaticus also known as Saxo cognomine Longus was a Danish historian, thought to have been a secular clerk or secretary to Absalon, Archbishop of Lund, foremost advisor to Valdemar I of Denmark. He is the author of the first full history of Denmark.- Life :The Jutland Chronicle gives...
, because there was already a Nigeria
Nigeria
Nigeria , officially the Federal Republic of Nigeria, is a federal constitutional republic comprising 36 states and its Federal Capital Territory, Abuja. The country is located in West Africa and shares land borders with the Republic of Benin in the west, Chad and Cameroon in the east, and Niger in...
n bank called Mida operating at an international level. Saxo obtained its new banking license in 2001, began expanding its online presence and moved to new headquarters in the Copenhagen suburb of Gentofte
Gentofte
Gentofte Kommune is a municipality in the Capital Region of Denmark on the east coast of the island of Zealand in eastern Denmark. The municipality covers an area of , and has a total population of 68,913...
.
Saxo Bank also decided to outsource work on their new software to a Russian company, Reksoft
Reksoft
Reksoft is an offshore software engineering company specialising in software development and system integration services, specifically software product engineering, enterprise application services and dedicated centres. Reksoft has passed certification audit ISO 9001:2008, and is assessed to comply...
, which worked on the software from August 2003 to December 2006.
Global expansion
Saxo Bank launched its products and services in Europe during the early 2000s. In 2001, its first White Label solution was launched with a Portuguese securities dealer. In September 2004, it also launched its first US white label solution. Following the launch of Citigroup's CitiFX Pro, an online foreign exchange trading platform developed by Saxo, in November 2008, the Bank would focus entirely on its institutional clients in the US.In March 2004, Saxo Bank had to halt its business in Australia because the Australian Securities and Investments Commission
Australian Securities and Investments Commission
The Australian Securities & Investments Commission is an independent Australian government body that acts as Australia's corporate regulator...
(ASIC) passed regulation requiring an Australian bank license to offer foreign exchange to private customers. Saxo had to terminate all its Australian retail clients and passed the accounts to two Australian institutional clients. Saxo had particular problems with the Australian authorities, as Danish legislation did not allow the country's regulator to sign a bilateral agreement with them. On 17 September, the issue was resolved, and ASIC granted Saxo a license to trade in Australia. Since then Saxo has also mainly focussed on institutional solutions in the Oceanian countries and territories.
In 2005, it won FXweek's e-FX Award, in the category Best Retail Platform and reported a 39% increase in pre-tax profits, while net profits rose DKK 161 million (EUR 21.6 million) to DKK 223 million. In 2006, Saxo expanding its presence primarily through white label clients and made changes to its structure, seeking to boost its retail forex with hires from the Danish business world. Internal restructuring took place and Lars Seier Christensen said the changes were made to reflect growth.
Acquisitions
In September 2007, Saxo announced the acquisition of its Swiss white label client, Synthesis Bank. In late May, Saxo bought a French brokerage, Cambiste, that was later renamed Saxo Banque France. During 2009, Saxo opened offices in Milan, Prague and Dubai. By year-end, Saxo Bank will have around 13-14 foreign sales offices, up from eight last year, Lars Seier Christensen told Dow Jones in May 2009. In August 2008, Saxo Bank hired the former head of the facility service and cleaning company ISS A/SISS A/S
ISS was founded in Copenhagen, Denmark in 1901 and has since grown to become one of the leading Facility Services companies in the world. ISS offers a wide range of services within the following business areas: cleaning services, support services, property services, catering services, security...
Eric Rylberg, as new Chief Operating Director, and Karsten Poulsen as his Deputy. The founders retained their executive titles. Shortly after, Rylberg and Poulsen implemented a rationalisation plan, reducing staff by around 1/3.
Saxo has since been growing through add-on acquisitions and startups, and has built an asset management department, Saxo Asset Management, legally segregated from the rest of the Bank, through acquisitions. In 2009, Saxo acquired Sirius Kapitalforvaltning and in June 2009, it purchased the full share capital of Capital Four Management Fondsmaeglerselskab A/S and 51% of the share capital of Global Evolution Fondsmaeglerselskab A/S, providing expertise for Danish bond & equity instruments. According to its annual results for 2009, Saxo Asset Management grew assets under management from DKK 10 DKK billion to more than DKK 20 billion by the end of 2009 and another 25% in Q1 2010 to DKK 25 billion. A special report on Danish HNW clients in the New York Times said that by July 2010, Saxo Asset Management handles 29 billion kroner in assets, 15.5 billion of which comes from ultra-high-net-worth clients.
Following a minority stake purchase in EuroInvestor, a Danish investment portal, in 2009, Saxo said it would speed up development of its trading systems by acquirering a 40% stake in Initto, a software company based in India and Ukraine and in 2010 it launched an equity profile incorporating elements from EuroInvestor. In July 2010, Saxo Bank increased its equity interest in EuroInvestor to 41%.
On 4 December 2009, TV2 (Denmark)'s financial news disclosed that the founders of Saxo was announcing to E*TRADE's Swedish and Danish employees that Saxo had entered into an agreement to acquire E*TRADE International’s local Nordic online trading business and online bank from E*TRADE Nordic AB, an indirect subsidiary of US-based E*TRADE FINANCIAL Corporation. In an interview with Dagens Industri, Lars Seier Christensen said that following regulatory approval Saxo Bank will have full banking license in Sweden. He also told its asset under management will increase by more than SEK 6.0bn and adds an additional 50,000 active accounts. E*TRADE's Nordic business also includes client accounts in the baltic region. According to other reports Saxo will now be able to offer pension products, stock and margin accounts, bond offerings and Funds Supermarket. Following a record year in 2008, net profit ended at DKK 201 million in 2009 with 80% earned in the second half of 2009.
On 6 October 2008, during the Financial Crisis, Saxo decided to join the Danish Sector Fund (Det Private Beredskab), and was as such encompassed by the two-year guarantee for deposits with Danish financial institutions. Saxo Bank declined to participate in the Government
Cabinet of Lars Løkke Rasmussen
The cabinet of Danish Prime Minister Lars Løkke Rasmussen, was announced on April 5, 2009 as Lars Løkke became prime minister after Anders Fogh Rasmussen was offered the post of Secretary General of NATO on April 4, 2009....
's Credit Package, saying it would lose money if it received capital from the state-funded Credit Package. On 24 March 2010, a majority in the Danish Parliament agreed on a new guarantee scheme, which would bring deposit guarantees into line with European Union rules. The new scheme takes effect from 1 October 2010. Like all other Danish banks, Saxo Bank is covered by the scheme.
2010 growth
In March, 2010, Saxo Bank launched a new equity platform able to trade in over 11,000 stocks and other products listed on 23 major exchanges worldwide.Saxo Bank was later named the Best White Label Solution Provider in the world, at the World Finance Foreign Exchange Awards 2010, citing "the Bank's long established program of investment and innovation within its White Label business".. In the same month the bank was also awarded Best re-labelling platform for 2010 by industry magazine Profit & Loss. Saxo was voted into the top spot by subscribers to represent 'reader's choice'.
In July, 2010, CEO Kim Fournais stated that the bank's 2009 turnover of 70 billion DKK on a daily basis had been broken, despite negative press at the start of the year. The growth is believed partly to spring from an explosive growth in Saxo Bank's largest partner, Citi, whose turnover resulting from trading grew nearly 500% in the first 6 months of 2010. In August, 2010, the Bank's half-year results revealed that net profit had indeed increased 13-fold from 41 million DKK to 551 million DKK, making the first six months of 2010 better than any other full year in Saxo Bank's history.
On 17 September, 2010, Saxo Bank announced plans to invest 59 million DKK in Brorup Sparekasse; a small Danish savings bank founded in 1897 with seven branches. The bank also said that it intended to offer at least 150 million DKK more in capital contribution when the terms for transforming the Brorup Sparekasse into a joint-stock company were fulfilled. Brorup Sparekasse ran into difficulties in 2008 and 2009, primarily due to failed speculation in unlisted bonds, which led to 2009 negative revenue of 74 million DKK before tax. Saxo Bank later announced that the terms for transforming Brorup Sparekasse into a joint-stock company were fulfilled with Saxo Bank as the largest shareholder owing 98,6%
In November, 2010, Saxo Bank launched an online equity platform with Microsoft
Microsoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...
. The personal MSN Trader - Powered by Saxo Bank allows individual investors to trade 11,000 shares on 23 exchanges globally "in combination with functionalities which were previously available to professional investors only". These include in-depth research such as being able quickly to compare investment opportunities in a company with its peers in the same sector. The platform was tailor-made for the MSN audience, featured on MSN Money
MSN Money
MSN Money, a service of MSN, is a website about business news, that is edited in association with CNBC. It provides stock exchange prices and financial information on companies. Information on stock and share options is also provided. Stock prices are also supplied through msnbc.com.The site also...
. It is said to mark one of the most significant deals in Saxo Bank's history.
In its 2010 results, Saxo Bank proved to have grown way beyond industry averages with profits trebling compared to 2009, but it also revealed that it had launched another online platform this time with Barclays Stockbrokers Ltd. to supply their UK client base with an International Equities solution. The solution, which goes under the name International Trader, encompasses over 9,000 equities, 21 major global exchanges in 13 international markets and an Equities research solution. The release were already being marketed widely in the UK marketplace as well as to Barclays' existing UK clients base. In May, 2011, Saxo Bank furthermore announced it would provide TD Waterhouse
TD Waterhouse
TD Waterhouse is the brand used for both Canadian and British brokerages within the TD Bank Financial Group. It was also formerly used for TD's American brokerage....
, the UK's leading execution only broker, with an online derivatives trading platform for retail investors.
Further expansion of products and services
In Scandinavia, Saxo Privatbank, a new physical branch in HellerupHellerup
Hellerup is a Danish town of Region Hovedstaden, located in the Gentofte Municipality in Denmark. It is bordered to the east by the sound Øresund and to the South by Copenhagen and counted among the most affluent areas in Denmark....
, Copenhagen
Copenhagen
Copenhagen is the capital and largest city of Denmark, with an urban population of 1,199,224 and a metropolitan population of 1,930,260 . With the completion of the transnational Øresund Bridge in 2000, Copenhagen has become the centre of the increasingly integrating Øresund Region...
, Denmark
Denmark
Denmark is a Scandinavian country in Northern Europe. The countries of Denmark and Greenland, as well as the Faroe Islands, constitute the Kingdom of Denmark . It is the southernmost of the Nordic countries, southwest of Sweden and south of Norway, and bordered to the south by Germany. Denmark...
, was launched offering banking services and advice to retail clients. Saxo Bank said that the newly opened branch will align its efforts with the specific wishes and needs of the clients and targets its offers towards clients who have their finances under control. According to a spokeperson from the Bank, Saxo Privatbank will in due time be represented in a string of the bigger Danish cities.
Saxo Bank tightened and standardised the pricing of foreign exchange options on its retail trading platform, SaxoTrader in a bid to boost transparency and attract more investors to the market. In an upgrade that went live in mid-May, the Bank improved spreads on FX options for all 40 of its currency pairs, with the new prices streamed to SaxoTrader. The tightening of spreads was applied to all existing and new clients, and was accompanied by an account standardisation process. Clients can now choose a classic, premium or platinum account, each with different spread levels and qualification criteria.
Furthermore, Markit announced that Saxo Bank would become the first financial institution to report its CFDs on Single Stock trades on a voluntary basis, in a bid to bring greater transparency to this fast growing market.
In order to attract more flow from high-frequency traders, Saxo Bank launched ForexTrading.com, a retail foreign exchange platform. Liquidity comes from the same 12 tier-one banks as for the Bank's SaxoTrader platform but the new service has a slimline offering, variable spreads, a low initial deposit of $2,000 and is serviced in English only.
Corporate headquarters and architecture
Saxo Bank is headquartered in Tuborg Havn in the northern outskirts of Copenhagen. The building, which received an RIBA International AwardRIBA International Award
RIBA International Awards are part of an awards program operated by the Royal Institute of British Architects, also encompassing the Stirling Prize and the European Award.The RIBA International Award rewards "the excellent work being done by RIBA members around the world"...
, was designed by Danish architects 3XN
3XN
3XN is a Danish architectural practice with head office in Copenhagen.-History:The company was founded in Århus in 1986 as Nielsen, Nielsen & Nielsen by Kim Herforth Nielsen, Lars Frank Nielsen og Hans Peter Svendler Nielsen. The latter left the company, which is today led by a partner group of...
, and is owned by Carlsberg Properties. The façade of the building is covered in diagonal white aluminium and blue glass patterns. In June 2010, Danish business newspaper
Newspaper
A newspaper is a scheduled publication containing news of current events, informative articles, diverse features and advertising. It usually is printed on relatively inexpensive, low-grade paper such as newsprint. By 2007, there were 6580 daily newspapers in the world selling 395 million copies a...
, Borsen, named the Saxo headquarters the "Kingdom's finest domicile"
Other Saxo Bank offices are located in Australia, the Czech Republic, Dubai, France, Greece, Hong Kong, Italy, Japan, Netherlands, Singapore, Spain, Switzerland and the United Kingdom.
Ownership and business model
Saxo Bank is privately heldPrivately held company
A privately held company or close corporation is a business company owned either by non-governmental organizations or by a relatively small number of shareholders or company members which does not offer or trade its company stock to the general public on the stock market exchanges, but rather the...
with co-founders Kim Fournais and Lars Seier Christensen holding majority stakes. Private Equity firm General Atlantic
General Atlantic
General Atlantic is a private equity investment firm. The firm invests through growth capital injections, control buyouts, industry consolidations, build-ups, recapitalizations, and PIPEs...
bought a minority stake in June 2005, for which the CEOs received more than $30 million each.. According to the 2009 annual report, Fournais Holding A/S and Lars Seier Christensen Holding A/S today own 30% each of the Bank. General Atlantic owns 22% of the Bank and Espirito Santo
Espírito Santo
Espírito Santo is one of the states of southeastern Brazil, often referred to by the abbreviation "ES". Its capital is Vitória and the largest city is Vila Velha. The name of the state means literally "holy spirit" after the Holy Ghost of Christianity...
Financial Group (Portugal’s third biggest financial group) with its subsidiary Banco Espirito Santo Group together hold 9.9% of the Bank’s shares, after taking a five percent stake in Saxo in 2008. The remaining interest is mainly held by a number of current and former employees of Saxo Bank.
According to Saxo representatives, so-called White Label Partnerships accounts for more than half of the bank's revenue providing re-distribution of the bank's platform to a broader public through partnerships. Private Wealth Management is a relatively new area of business.
Public relations
In 2008, Saxo Bank admitted editing its own Wikipedia entry through an anonymous user to remove information it said was untrue. When confronted by the media it acknowledged that a "slightly more elegant solution" should have been found.Sponsorships
In mid-June 2008, Riis Cycling A/S announced that Saxo Bank had entered a three year contract as title sponsor, with immediate effect, so the team entered the 2008 Tour de France2008 Tour de France
The 2008 Tour de France was the 95th Tour de France. The event took place from 5–27 July 2008. Starting in the French city of Brest, the tour entered Italy on the 15th stage and returned to France during the 16th, heading for Paris, its regular final destination, which was reached in the 21st stage...
as Team CSC Saxo Bank. Carlos Sastre
Carlos Sastre
Carlos Sastre Candil is a retired Spanish professional road bicycle racer and champion of the 2008 Tour de France. Sastre rides in 2011 for UCI Professional Continental team...
won the Tour, and the team took the team classification. In 2009 and 2010, Andy Schleck
Andy Schleck
Andy Raymond Schleck is a Luxembourgish professional road bicycle racer for UCI ProTour team . He is the younger brother of Fränk Schleck, who also rides for . Their father Johny Schleck rode the Tour de France and Vuelta a España between 1965 and 1974...
finished the Tour in second place. When the bank signed the sponsorship agreement with Riis Cycling A/S, it noted that the team “has the international reach and name recognition that means we will be able to get our message our to most of our client groups around the globe. We love the sport, and believe that together we will be winners.”. While the bank announced in January 2010 that it would not extend its sponsorship beyond 2010, it surprised everyone Lars Seier Christensen together with Bjarne Riis
Bjarne Riis
Bjarne Lykkegård Riis , nicknamed The Eagle from Herning , is a Danish former professional road bicycle racer who placed first in the 1996 Tour de France, and is now the team owner and manager of Danish UCI ProTour outfit Team Saxo Bank Sungard...
announced to the public on 3 August 2010 that Saxo Bank had extended its sponsorship of Riis Cycling for another year, and that Tour winner Alberto Contador
Alberto Contador
Alberto Contador Velasco is a Spanish professional road bicycle racer for UCI ProTeam . He was the winner of the 2007 Tour de France with the team. With the Astana team he has won the 2008 Giro d'Italia, the 2008 Vuelta a España, the 2009 Tour de France, the 2010 Tour de France and won 2011 Giro...
had signed onto the team, with the aim of winning all Grand Tours
Grand Tour (cycling)
In road bicycle racing, a Grand Tour refers to one of the three major European professional cycling stage races:* Tour de France – Tour of France , held in July* Giro d'Italia – Tour of Italy , held in May...
(the Tour de France
Tour de France
The Tour de France is an annual bicycle race held in France and nearby countries. First staged in 1903, the race covers more than and lasts three weeks. As the best known and most prestigious of cycling's three "Grand Tours", the Tour de France attracts riders and teams from around the world. The...
, the Giro d'Italia
Giro d'Italia
The Giro d'Italia , also simply known as The Giro, is a long distance road bicycle racing stage race for professional cyclists held over three weeks in May/early June in and around Italy. The Giro is one of the three Grand Tours , and is part of the UCI World Ranking calendar...
and the Vuelta a España
Vuelta a España
The Vuelta a España is a three-week road bicycle racing stage race that is one of the three "Grand Tours" of Europe and part of the UCI World Ranking calendar. The race lasts three weeks and attracts cyclists from around the world. The race is broken into day-long segments, called stages...
) in one year.
Saxo is a sponsor of 'CEPOS University', the company also pays for reprinting and distributing several books Denmark; including Ayn Rand
Ayn Rand
Ayn Rand was a Russian-American novelist, philosopher, playwright, and screenwriter. She is known for her two best-selling novels The Fountainhead and Atlas Shrugged and for developing a philosophical system she called Objectivism....
's novel Atlas Shrugged
Atlas Shrugged
Atlas Shrugged is a novel by Ayn Rand, first published in 1957 in the United States. Rand's fourth and last novel, it was also her longest, and the one she considered to be her magnum opus in the realm of fiction writing...
, which the bank had retranslated into Danish and distributed 10,000 copies (each new employee of the bank receives a copy). In May 2007, Saxo Bank donated one million DKK to the centre-right party Ny Alliance (later theLiberal Alliance), CEO Lars Christensen later joined the party himself.
Background
While the first half of 2010 had been months of tremendous growth for Saxo Bank, allegations from former employees and two former clients sparked a two month media crusade against the bank. Saxo Bank were later cleared of all allegations and Danish Berlingske Tidende characterised Saxo Bank's media crisis as a bitter clash between the founders and former employees as well as former clients most likely due to personal disappointments or economic matters.Media storm and subsequent steps by Saxo
In April 2010, a Portuguese financial institution accused Saxo Bank of manipulating stock and currency prices, claiming it lost 10 million euros.In May, a Lebanese investor said his company had lost 20 million DKK in four months because of unstable pricing and error interruptions on the SaxoTrader. Saxo Bank rejected that errors are a common thing and claimed that the SaxoTrader has an uptime of 100%
J. Korsoe Jensen, Attorney at Law for Saxo, issued lawsuits against the two former clients in June, 2010, for false accusations.
The new Chairman of the Board of Saxo Bank, Kurt Larsen, admitted to Berlingske Tidende that the lawsuits filed against the two former clients were indeed very unusual measures. However, he also said:
Completion of FSA review and independent investigation
In July 2010, the Danish FSAFinancial Supervisory Authority (Denmark)
The Danish Financial Supervisory Authority is the financial regulatory authority of the Danish government responsible for the regulation of financial markets in Denmark....
completed their investigation of Saxo Bank, having analysed its trading platform and protection of investors. The Danish FSA found its automated trading system sufficiently transparent to users. Furthermore, the FSA found no remarks vis-à-vis the bank's service regarding of trading tips on the platform, the technical structure of the system or its robustness. Likewise, the Danish FSA concluded that the evaluation version of Saxo Bank's trader would permit possible clients to experience dealing with trading complex products without risk before they became customers for real.
However, the Danish FSA ordered an independent investigation of whether trades executed manually and performed on the Bank's electronic trading system are generally being executed in accordance with the Bank's common trading conditions and Best Execution Policy. In late August, it was announced by the Danish FSA that the investigation would be done by Oliver Wyman
Oliver Wyman
Oliver Wyman is an international management consulting firm. Founded in 1984, the firm adopted its current form in May 2007, when Mercer Oliver Wyman joined with Mercer Management Consulting and Mercer Delta to become one firm named Oliver Wyman. Oliver Wyman is headquartered in New York City with...
, the international consulting company.
The independent investigation is said to have cost Saxo Bank millions and were two months overdue when on 29 November, 2010, the Danish FSA published a statement, saying that Oliver Wyman had concluded that "Saxo Bank was not systematically mispricing its manual order flow to the detriment of its clients or in violation of its General Business Terms and its Best Execution Policy" and "that it could find no evidence of clients being systematically unfairly treated at the individual level". Based on the above mentioned conclusions, the Danish FSA found that the investigation by Oliver Wyman did not give cause for pursuing anything further regarding Saxo Bank's execution of manually executed trading orders nor regarding Saxo Bank's trading system. The statement also said that the instruments represented in the cases covered by the Danish media, this summer, and the client complaints received by the Danish FSA had been taken into account.
Criticism of the Danish FSA
Following the announcement of the Danish FSA on 8 July, Lars Bo Langsted, a professor of economic law at Aalborg University stated that:The WeeklyFix column suggested that the Danish FSA had been pressured to act on Saxo by press reports. "There is no doubt the Danish FSA has felt under pressure to act (...) This begs the question, since when did financial authorities spring into action on the back of media speculation?"