Saxo Bank, a Danish bank specialized in providing online trading services, said on Tuesday it has tuned to a new order-driven execution model that aligns forex instruments, including forex spot, forex forwards and contracts for difference (CFDs) on indices and commodities. The method is currently in testing and is scheduled to be launched in November this year.
Forex options are out of scope and will continue to trade on a quote-driven model (green pricing).
With the new method, the broker consolidates its multi-asset trading offering as it aligns its practiced for the listed assets with those used for other asset classes. The implementation of the order-driven model allows Saxo Bank clients to access executable prices based on the broker’s own liquidity as well as the liquidity available on a direct market access (DMA) basis in the broader market. Moreover, traders gain greater control and transparency over their orders by defining themselves price tolerances and price improvements that allow for partial fills.
“At Saxo Bank we are doing our part to drive the FX industry to improve because it is of utmost importance to us that our clients are early beneficiaries of the heightened trust and improved execution that enhanced transparency will bring,” said Kurt vom Scheidt, global head of foreign exchange at Saxo Bank. “This shift in order execution model is our latest of a number of initiatives we have pursued this past year toward that end and we look forward to the continuation of this process leading to better standards and higher industry norms,” he added.
Saxo Bank implemented order-driven execution model for stock CFDs in late 2015, providing clients with faster and more transparent order execution.
“We started this move towards maximizing clients’ access to market liquidity last year when we converted our CFD Single stock product to a pure DMA model utilizing market leading Smart Order Routers to gain the best possible liquidity sourcing and optimize executions to our clients,” said Soren Nedergaard, global head of CFD & listed products at Saxo Bank. “Now we continue this journey into the remaining CFD products and strongly believe this will benefit our clients.”
Saxo Bank holds a banking license from Denmark’s Financial Supervisory Authority (FSA) and acts as a brokerage firm and a market maker, offering trading in more than 30,000 instruments, including forex, binary options, CFDs, stocks, futures, and bonds. It also offers traditional banking services through its unit Saxo Privatbank. The group works with retail and institutional clients alike via 25 offices and has subsidiary companies across Europe, Asia and the Middle East, Australia, South America, and South Africa.