Saxo Bank faces a DKK 313,000,000 (49.7 million)
administrative fine from Denmark’s financial watchdog after supervisors flagged
anti-money laundering weaknesses in its institutional operations.
The Danish Financial Supervisory Authority issued the
fine after finding that Saxo Bank breached its regulations between 2021 and 2023.
“The administrative fine is based on the company’s
failure to comply with the requirements for obtaining information regarding the
purpose and intended nature of a number of customer relationships, as well as
compliance with the requirements for ongoing monitoring for White Label Clients,”
the regulator mentioned in the official announcement, as translated to English.
Systemic Deficiencies in Controls
The regulator concluded that the bank failed to obtain
sufficient information about the purpose and intended nature of certain
customer relationships, in particular those linked to white-label partners.
Under the white-label model, Saxo Bank provides its
trading platform to partner institutions, whose clients then access markets
through Saxo’s infrastructure.
Although the FSA did not identify specific cases or
signs of money laundering, it concluded that the systemic deficiencies in
controls justified a substantial response. The fine is framed as a reaction to
risk management failures, not evidence of criminal activity.
According to the decision, an initial calculation
pointed to a higher penalty, but the FSA applied a reduction after Saxo Bank
actively cooperated with the investigation and took immediate steps to restore
compliance.
The FSA carried out its inspection of Saxo Bank in May
2023 with a focus on anti-money laundering controls in correspondent
relationships within the institutional business. The review also covered
broader internal controls and the functioning of the compliance department.
Saxo Bank Speaks
Saxo Bank has accepted the administrative fine, signaling
that it will not challenge the FSA’s conclusions. Chief executive and founder Kim Fournais said the bank
has launched “a number of strategic and operational initiatives” and invested
heavily to strengthen defenses against money laundering.
“Since the inspection in May 2023, Saxo Bank has taken
a number of strategic and operational initiatives and invested significantly in
the prevention of money laundering and terrorist financing, including improving
processes, procedures and reporting in a wide range of areas.
“Compliance with all applicable laws, rules and
regulations in the markets in which Saxo Bank operates is of the highest
priority.”
This article was written by Jared Kirui at www.financemagnates.com.
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