Saxo Bank to introduce collateral profiles for stocks and bonds, separate to margin profiles

Maria Nikolova

Saxo is separating the configuration of stock and bond collateral factors from the current margin requirement profiles into a separate collateral profile.

Saxo Markets, the institutional division of multi-asset trading and investment expert Saxo Bank, has informed its White Label clients it will be separating the configuration of stock and bond collateral factors from the current margin requirement profiles into a separate collateral profile.

This new collateral profile will be effective from October 2, 2017 and will be configurable on a client level via SaxoTools and the CMS API (as the margin requirement profile is at present).

To secure a smooth transition for clients with custom margin requirement profiles, Saxo will automatically assign a collateral profile to the White Label partners’ clients that result in unchanged collateral terms unless instructed otherwise not later than September 22, 2017.

The assignment of profiles will be based on the following principles:

  • If the collateral definition of the margin requirement profile matches Saxo Bank Default, the client will be assigned the Saxo Bank Default Collateral Profile.
  • If the collateral definition of the margin requirement profile does not offer any collateral, the client will be assigned a No Collateral Profile.
  • In all other cases, a new collateral profile will be created with the same name and collateral as the current Margin Requirement Profile.

If the clients are assigned the Saxo Bank Default Collateral Profile, then their collateral terms will automatically change when Saxo Bank deems it necessary to review collateral terms for its own direct clients going forward.

On top of the introduction of the Saxo Bank Default Collateral Profile, the bank will also be making a new profile ‘Saxo Bank EMIR Collateral Profile’ available on request. This profile is configured with the same collateral values as the Saxo Bank Default Profile but only for a subset of stocks that are deemed to be a member of a main index according to EMIR regulations.

Saxo has recently made a series of moves in order to respond to the new EMIR and MiFID II reporting rules. For instance, the bank has informed its white label partners that all corporate entities need to provide their LEI (legal entity identifier) by October 1, 2017. In case Saxo’s partner is delegating EMIR reporting to Saxo, the bank will also have to be provided with LEIs on all of the partner clients falling within this definition.

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