The Financial Supervisory Authority (FSA) checked Saxo’s procedures for access to systems and data, outsourced IT capabilities, reports and audit.
Multi-asset trading and investment services provider Saxo Bank has successfully passed a check by Denmark’s Financial Supervisory Authority (FSA). Earlier today, the Danish regulator published the results of the IT inspection on its website.
The check was conducted from March 2017 to May 2017. The regulator checked Saxo’s IT security management, IT strategy, organization, contingency plans, security policies and guidelines. Furthermore, the FSA reviewed Saxo Bank’s procedures for access to systems and data, system audit, outsourced IT capabilities, and the requirements and procedures for reporting.
The regulator notes that Saxo Bank’s business model makes the bank highly dependent on a stable and secure IT environment. It adds that Saxo Bank has implemented well-documented business procedures to control risks and to report to the Executive Board and the Board.
A recommendation the Danish Financial Supervisory Authority made is for Saxo Bank to ensure that all outsourcing agreements are adequately risk-assessed and that they are in line with the bank’s policies and procedures in this area.
Saxo Bank is known for its strict compliance with regulatory demands. Denmark is now gearing up to new MiFID II rules. One of the provisions of MiFID II prohibits investment companies from receiving and keeping any fees, commissions or other payments in money or in kind from (inter alia) investment funds in connection with the provision of discretionary portfolio management to the customers. This rule, known as a ban on IB inducements, is set to come into force on July 1, 2017 in Denmark.
To comply with the new rules, Saxo Bank is implementing special measures.
As per the new requirements, Saxo Bank A/S cannot pay inducement to IBs offering discretionary portfolio management to the customers or independent advice, as of July 1, 2017. The company plans to implement a number of solutions that will allow its IBs to work within certain boundaries or move to a non-inducement fee model.