Saxo Singapore Introduces Margin Financing With New Risk Tools

Saxo Bank says its Saxo Singapore unit has started margin financing accounts, giving clients a dedicated space for investments purchased with borrowed funds. The new setup separates these positions from the rest of a client’s holdings, making it easier to track exposure linked to borrowing.

Along with the new account structure, Saxo is adding changes that aim to fine-tune how clients manage risk and leverage. One change concerns collateral treatment. Tiered collateral levels now apply to stocks and exchange-traded funds in risk categories 2 to 5, which can translate into more leverage for certain instruments.

Saxo Singapore Introduces Margin Financing With New Risk Tools

Another change is the shift to partial stop-outs on Margin Lending Accounts. Previously, margin calls could result in full liquidation, but the new system allows only part of a client’s holdings to be closed if required. According to Saxo, this creates a more proportionate approach to risk management and helps users maintain positions without triggering complete exits.

Margin lending was first added to Saxo’s line-up in 2023. The bank says feedback from Singapore clients influenced the latest adjustments and that the aim is to strengthen the overall experience.

Mahesh Sethuraman, Singapore chief executive, said Saxo continues to shape its platform around client requests and behaviours. He added that the changes aim to give investors more flexibility, clarity, and strategic control, whether they seek additional buying power or want to make more of dividend income.

Margin financing allows investors to borrow against existing portfolios to invest in stocks, ETFs, and bonds. The portfolio serves as collateral for the borrowed funds. The method comes with a higher risk because losses can increase when markets move against a position, but it can also increase the scale of trades that investors already feel confident about and potentially lift dividend yields.

When a user activates a Margin Lending Account in Saxo Singapore, a separate account labelled “Margin Lending” appears. Trades in equities, ETFs, bonds, and stock options can then be in support with the margin loan. Borrowed funds can also be used for physical delivery if option positions lead to assignment.

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