The UK arm of Leading Danish investment services provider, bank and retail forex broker Saxo Bank said on Thursday it decided to leave the UK CFD and FX Association, a margin trading industry group. The decision is taken after thorough consideration of recent proposals in the Financial Conduct Authority’s (FCA) with regards to consumer protection.
We remind you that soon after FCA proposed a leverage cap of 1:50 and ban on trading bonuses, Saxo Bank UK made a statement that it would be unaffected by possible regulatory changes in the UK. The new regulatory rules are not yet formally adopted.
According to the official statement on the broker’s website, Saxo Bank UK pulled out of the association because it was not sufficiently reflecting their views and interests. And for Saxo Bank it is important that the company interests are aligned with those of their clients.
“Trading CFDs and FX instruments brings a number of advantages to retail investors that have previously been the preserve of larger financial institutions,“ said Kim Fournais, Saxo Bank CEO and founder.
Nonetheless, Mr. Fournais outlined that the Saxo Bank group welcomes the FCA’s proposals to set responsible boundaries on leverage that and added that these are in fact “roughly in line” with the maximum leverage used by their active clients. “Trading with excessive leverage leads to a significant risk of frequent stop-outs which leads to client losses. We have no interest in offering clients too high leverage just to see clients being stopped out, ” he stated.
The UK CFD and FX Association consists of firms operating in the spread betting and foreign exchange markets with the objective of promoting their common interests. Major UK brokerages IG Group and CMC Markets are also members of the association.
Established in Copenhagen in 1992, Saxo Bank is a brokerage firm, a bank and a market maker. It offers trading in more than 30,000 instruments, including forex, binary options, CFDs, stocks, futures, and bonds through its proprietary online trading platforms SaxoTrader and SaxoTraderGO.
Earlier this month the company reported that its trading volume in May has risen by 13.8% MoM.