Best Banks Awards: Saxo Bank
Saxo Bank wins the Best Prime-of-Prime House category at the 2018 FX Week Best Banks Awards
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
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
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
Best Bank for FX in Asia-Pacific
Best Bank for Renminbi
Best Bank for Emerging Asian Currencies
Best Bank for FX in the Eurozone
Best Bank for Australian Dollar
Best Bank for GBP/USD
Best Bank for EUR/GBP
Best Bank for FX in London
Best Bank for Swiss Franc
Best Bank for FX Post-Trade Services
Best Professional e-Trading Venue
Best Vendor for Dealing Technology
Best Broker for Forward FX
Best Broker for Emerging Markets FX
Best FX Clearing House
Best Broker for Spot FX
Best Market Data Provider for FX
Best Bank for Scandinavian Currencies
Best Bank for South African Rand
Best Bank for African Currencies excluding ZAR
Best Bank for Canadian Dollar
Best Bank for Emerging Latin American Currencies
Best Vendor for Risk Management/Options Pricing Software
Best Prime-of-Prime House
BGC (no interview)
Best Broker for Currency Options
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