Trading Services for Institutional ClientsPatrick A.H. Mortensen, Director

March 2010

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The Saxo Bank story

Saxo Bank is a leading facilitator in the global capital markets, aggregating liquidity, offering access to exchanges around the world and providing its powerful suite of products and platforms to institutional clients, private clients, partners, banks and brokerages.

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Saxo Bank is established in September 1992by Kim Fournaisand Lars Seier Christensen.

Saxo Bank is approved as an EU-regulated bank by the Danish FSA.

SaxoTrader’s predecessorMITS, which enabled online FX trade execution, is launched.

Saxo Bank enters into the online FX market with www.forextrading.combuilt on an aggressive IT-based strategy.

General Atlantic LLC, a global private equity investment firm, invests DKK 728 million (about USD 127 million) in Saxo Bank.

Saxo Bank’s opens first global offices in London and Singapore.

employees, 560 of which are based at HQ in Copenhagen, DK

• Offices in

of all staff are full-time IT staff, and stake in Initto acquired

nationalities

• Clients in

• Daily average FX turnover approx.

• Approx. in Assets Under Management (100% increase since Dec. 2008)

: FX Spot, FX Forwards, FX Options, CFD, CFD DMA, CFD Commodities, Futures, Shares, ETF/ETCs and Off-line bonds

(SaxoWebTrader, SaxoMobileTrader & SaxoTrader) accessible through one account

ABOUT SAXO

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Selection of recent awards

to online trading business and a focus on institutional clients

• Reliability of working with a bank

online trading: FX, Options, CFDs, Stocks, Futures and ETFs

• Back-office administrative services with real-time and comprehensive reporting

• Trading infrastructure supporting and

• Three platforms accessible through one account

• Streaming, real-time data and market updates

(B2B FIX 4.3)

services

• CLS 3rd party member

pricing and

Account Management and Sales Trading

WHY SAXO

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Fabian Cancellara, 2009 UCI Road World Champion, Time Trial

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Saxo Bank’s suite of products support easy trading in multiple assets

• 150+ crosses

• Spot

• Forward outrights

• Streaming FX options

• Spot gold and silver

• 23 exchanges

• 6,000+ CFDs

• CFDs DMA

(Direct Market Access)

• 15 index-tracking CFDs

• Main CFD Commodities

• 22 exchanges

• 11,500+ Stocks

• Real-time access

• 850 ETFs/ETCs

• 15 exchanges

• 450+ instruments

• Online and offline

commodities trading

• Traded offline

• Over 250 sovereign,

government and

corporate bonds

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Three trading platforms - integrated into one account

The multi-award winning SaxoTrader is a comprehensive,

downloadable trading platform, covering all asset classes.

Offers advanced charting, multiple order types, real-time

account data, price alerts, chat, research and more.

Fast execution (streaming of 3-4 prices per second on 160

currency crosses)

Reliable trading environment (99,95 % avg. uptime in 2009)

The SaxoWebTrader is a web-based trading platform for

anywhere, anytime market access.

Supports charts, multiple order types, research, chat, real-time

account data. Operates on Internet Explorer, Firefox and Safari.

The SaxoMobileTrader gives 'on the go' access to account data

through a browser enabled mobile device including iPhone and

BlackBerry.

Read news and analysis, place or change orders and trade.

Reporting and Monitoring (In the trading platforms)

Real/time Account Summary ● Cross Product Margin Calculation ● Open Positions Module ● Open

Orders Module ● Trades Booked ● Roll-overs ● Trades Executed ● Account Statement ● Corporate

Actions ● Activity Log ● Full Omnibus Overview ● Sub-accounts ● Multiple Currency Set-up

Reporting and Monitoring (Back-office integration)

Flat text files, sampling all parameters of all trading and account activities during the past 24

trading hours

Formatted in CSV and XML

More than 100 different types of files reporting everything from trade execution and bookkeeping

activity to open market risk

The files are generated daily and are delivered via FTP or by email

Available through FTP and email

Used for integration of trading with Saxo Bank into one consolidated risk management/front office

environment

Instant trade matching

Automation of Give-Ups

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FIX API Services (B2B FIX 4.3)

• Based on • Dedicated in-house FIX Support Group

monitoring connectionsand round-trip

times ranging from 42 ms to 62 msranging between

• Supports End-of-day files for reporting• Supports both omnibus and client-level

risk management• +150 and order placement in

(19 exchanges), (20 exchanges) and (15 exchanges)

• Competitive FX price feed• Supporting web service APIs on account

details• Server traffic routed through an

encrypted

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Saxo Bank as Executing Broker

Aggregation of collateral requirements with existing FXPB

Saxo Bank needs only a Counterparty Agreement Notice “Notice” (drafted by FXPB and reviewed

and approved by Saxo)

Consolidate and customize reporting through the existing FXPB

Trade allocation, confirmation and settlement consolidated with FXPB

Primary documentation required only with the FXPB

Access to Saxo Bank pricing and liquidity in +150 FX crosses

Saxo Bank has existing relations with several Teir-1 FX banks

Maximum tenor

Settlement and or open position limits

Account trading currency

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Continuous Linked Settlement (CLS)

Efficient management of liquidity and

reduction of credit risk

No prime brokerage fees

Saving costs of netting exposures between

counterparts

Multilateral netting effect

Reduction in operational risk

Source: CLS-Group publications

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Trading line and credit line (only FX)

Based on a credit evaluation, Saxo Bank will establish a FX trading line, allowing the partner to trade

with Saxo Bank, on our platform and using our prices, without having to deposit collateral with the Bank.

A Saxo Bank trading line consists of a pre-defined maximum net exposure, i.e. sum of the nominal value

of open FX positions. For instance, a partner with a trading line of USD 25,000,000 would be able to

enter into positions with a total exposure of USD 25,000,000.

Specific settlement policies are defined on a client-by-client basis

Opening a trading line carries a financing cost

In conjunction with the trading line, Saxo Bank will establish a credit line. The credit line governs the

actual account status a partner can have on the trading line account.

For instance, a trading line account with a credit line of USD 200,000 would allow a partner to have a

loss of up to USD 200,000.

Reach of credit lines will issue a cash call, requiering a cash deposit

Specific rules on cash calls, trigger levels and handling of exposures depend on the trading

relationship and the credit evaluation

Opening a credit line are subject to an interest charge

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Account Management

The dedicated Saxo Bank Account Manager is responsible for the overall institutional client relationship and is the to all other relevant departments within Saxo Bank

Single point of contact for non-trade related

requests, such as:

Build and develop client relationship

Introduce client to Saxo offering

Handle escalation of client requests and

queries with full ownership

Account set-up

Trading terms

Communicate new Saxo Bank features

and services

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Sales Trading

Saxo Bank allocates Sales Traders to all institutional clients. Depending on the needs of the Institutional Client the relationship with the Sales Trader can range from handling trade requests to discussing market movements and trade ideas.

Main point of contact for trade related

requests, such as:

Offline Trading

Quoting and placing trades

Changing orders

Provide trade ideas

Trade activity explanation

Handle trading related complaints

Ensure MiFiD compliance

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Setting the business in motion

Evaluating joint business potential

•Understanding of Saxo Bank offering and institutional client needs

•Negotiation of trading terms

Relevant documentation

•License, if applicable

•Certificate of incorporation

•Signatory list (could be in other corporate documents)

•Proof of identity for authorized signatories

•Corporate Ownership Disclosure

Saxo Bank Legal Landscape

•Institutional Trading Agreement

•ISDA Master Agreement

•ISDA Schedule

•Or “Notice” from FX Prime Broker

Implementation

•Set-up trading infrastructure

•Introduction to Account Management

•Introduction to Sales Trading

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