ASIC finalises investigation into Saxo Bank A/S following Sonray collapse
The Australian Securities and Investments Commission (ASIC) announced it has finalised its investigation into Saxo Bank A/S, the former provider of the trading platform for collapsed broker, Sonray Capital Markets Pty Ltd (in liquidation) (Sonray).
Following the conclusion of that investigation, which focused on the risk management practices of Saxo Bank, ASIC has agreed with Saxo Bank that additional licence conditions will be included on the Australian financial services (AFS) licence under which it will continue to conduct its business in Australia.
The additional licence conditions agreed with Saxo Bank, which apply to Saxo Capital Markets (Australia) Pty Ltd (SCMA) require SCMA to:
- engage an expert to review and report on the adequacy of SCMA's risk management systems to properly address credit risk, client risk and compliance risk;
- implement any recommendations made by the expert over a six month period;
- engage the expert for further reviews and reporting over an 18 month period following the initial expert report, and
- provide ASIC, on a bi-annual basis, independent verification of client monies being held by SCMA.
Since September 2004, Saxo Bank has held an AFSL authorising it to provide financial services on a wholesale basis. Under that wholesale licence, Saxo Bank contracted with a number of retail licensees in Australia, including Sonray, to facilitate the trading of various financial products on a trading platform, Saxo Trader.
Saxo Bank will now provide financial services in Australia to retail clients directly through the entity SCMA. This follows Saxo Bank, in late December 2011, acquiring control of Commodity Broking Services Pty Ltd by purchasing the shares of Logos Commodities Pty Ltd, the holding company of CBS. At the same time, CBS changed its name to Saxo Capital Markets (Australia) Pty Ltd.