URL: www.saxobank.com

Bank Status

Saxo has an immediate edge over most other brokers in that it can legally call itself a bank. Even brokers as large as FXCM and GFT are not able to do that, and will likely not register as banks for the forseeable future. Saxobank, on the other hand, seems to have had the foresight to realize that, in an industry as novel and under-regulated as foreign exchange, the level of trust a client can place in his broker is paramount.

By registering as a bank, Saxo has overcome one of the primary barriers to growth as an FX broker--the "security of funds" dilemma faced by many small brokers.

Note that while Saxo is legally a bank, client funds are still held with another, much larger bank, Deutsche Bank. Additionally, funds are protected--"guaranteed" even--by the Danish Guarantee Fund for Depositors and Investors, but only up to approximately 30,000 EUR in cash and 20,000 EUR in securities. There remains a substantial glass ceiling, meaning that investors and traders considering depositing hundreds of thousands of dollars and beyond face the same issues as anyone holding funds with any broker without a bank guarantee.

Size

A brief note on size, seen in the industry as a further indication of a broker or bank's ability to provide a safe FX product:

Saxo is one of the few FX brokers to provide detail on the number of individuals they employ--800 as of mid-2007. FXCM, one of the few other FX market makers to provide this data, and one of the largest FX brokers, states publicly that they employ "over 500" individuals.

Platform Recognition

Saxo's website is littered with awards for its platforms from recogized industry publications. The two most important are FX Week and Euromoney, which it seeems to win year-in, year-out for the relevant categories.

Keep in mind that large banks--Deutsche Bank, UBS, Citigroup, etc.--spend countless hours and dollars attempting to gain top spots in the relevant categories for themselves. Therefore, to see a single retail broker or bank winning the majority of these awards in such a competitive industry speaks highly of Saxo's product.

Multi-Asset Product

Clients typically must separate their FX trades from other investments they have, such as stocks, bonds, and futures. Saxo's aim is to provide a multi-asset platform where clients--at least those in Europe and other non-restricted locations--can trade several markets from a single platform. For the average retail client, this simplifies their investment world, allows them to save money on wiring funds into and out of accounts to cover margin, and prevents them from having to log into several sites to manage their accounts. For Saxo, it means that when they gain an FX customer, they gain a potential customer for all other products.

They currently offer forex spot, forex options, forex forwards, stock CFDs on 22 exchanges, stocks on margin from 19 exchanges, futures, spot precious metals, managed funds, and bonds. This list is in some ways deceptively comprehensive. Forex is clearly Saxo's forte, yet it's expansion into other products gives it a foothold in areas other FX brokers are not involved in at all.