Best Banks Awards: Saxo Bank

Saxo Bank has become a well-established provider of credit to market participants who choose not to get traditional prime brokerage (PB) relationships or are too small for the FXPB banks to take on as clients. The prime-of-prime (PoP) provider space, in which Saxo operates, has also matured since 2015, when the service first became popular.

“There are several different models in the market – they are not all the same. It’s distinctive what each PoP offers,” says Peter Plester, head of FXPB at Saxo Bank.

Immediately after 2015, PoP providers mushroomed in number as prime brokers raised minimum requirements and refocused on larger clients. In the last three years, however, a handful of bigger PoP shops have thrived while others wilted.

These providers offer slightly different flavours of prime to customers and typically target a certain client segment for services. Plester says Saxo’s prime offering attracts larger clients with up to $20 million in assets, including proprietary trading firms, brokerages, family offices, hedge funds and money managers.

Saxo connects these clients to about two-dozen bank and non-bank liquidity providers, as well as nine ECNs, and it manages liquidity for its clients. Plester emphasises that Saxo does not trade against its clients or act as a liquidity provider in client liquidity pools.

We run a true PoP model, so we are a proper credit intermediary. We don’t put our own price feed in, so we are not in conflict with the client

Peter Plester, Saxo Bank

“We run a true PoP model, so we are a proper credit intermediary. We don’t put our own price feed in, so we are not in conflict with the client. We are looking for a win-win, so the client wins and we win by them paying us transparent commissions,” says Plester.

Saxo Markets was voted Best Prime-of-Prime House at the 2018 FX Week Best Banks Awards.

The bank has also introduced a dynamic credit-allocation model across its three matching engines in London, New York and Tokyo, along with a full-amount feed for clients trading order sizes of between $5 million and $50 million.

The full-amount feed is aimed at minimising the market impact of trades as it allows clients to request-for-quote for a full-amount order on a bilateral basis. The bank protects liquidity providers by restricting clients from putting in additional trades after a full-amount request until at least five seconds have passed.

Saxo also offers credit across several asset classes in 37,000 financial instruments. The Danish institution’s strong capital position and European banking licence also boosts its PoP allure, says Plester.

“We have been in the liquidity management space for over 25 years, so we have a lot of experience in managing liquidity for ourselves and our clients. We also have a lot of deep and long-lasting relationships with liquidity providers, prime brokers, exchanges, etc, so that is a big advantage for clients who use us,” he adds.

Interviews with the 2018 FX Week Best Banks Awards winners

JP Morgan

Best Bank Overall for Foreign Exchange Dealing

Best Bank for FX for Banks

Best Bank for FX for Investors

Best Bank for Spot FX

Best Bank for FX Forwards

Best Bank for EUR/USD

Best Bank for USD/JPY

Best Bank for EUR/JPY

Best Bank for E-Trading

Citi

Best Bank for FX for Corporates

Best Bank for Currency Options

Best Bank for Structured Products

Best Bank for FX Prime Brokerage

Best Bank for FX in North America

Best Bank for Emerging European, Middle Eastern and African Currencies

Best Bank for FX Research and Strategy

HSBC

Best Bank for FX in Asia-Pacific

Best Bank for Renminbi

Best Bank for Emerging Asian Currencies

Deutsche Bank

Best Bank for FX in the Eurozone

ANZ

Best Bank for Australian Dollar

Barclays

Best Bank for GBP/USD

Best Bank for EUR/GBP

Best Bank for FX in London

UBS

Best Bank for Swiss Franc

NatWest Markets

Best Bank for FX Post-Trade Services

360T

Best Professional e-Trading Venue

Best Vendor for Dealing Technology

Refinitiv

Best Broker for Forward FX

Best Broker for Emerging Markets FX

LCH

Best FX Clearing House

EBS

Best Broker for Spot FX

Bloomberg

Best Market Data Provider for FX

Danske Bank

Best Bank for Scandinavian Currencies

Standard Bank

Best Bank for South African Rand

Best Bank for African Currencies excluding ZAR

BMO Capital Markets

Best Bank for Canadian Dollar

Banco Santander

Best Bank for Emerging Latin American Currencies

kACE

Best Vendor for Risk Management/Options Pricing Software

Saxo Bank

Best Prime-of-Prime House

BGC (no interview)

Best Broker for Currency Options