Stock brokerage BinckBank fined over a half-million euros for not protecting clients

Stock brokerage BinckBank has been fined 530,000 euros by the Dutch Authority for the Financial Markets (AFM). The regulator said BinckBank did not do enough for years to determine whether customers had enough knowledge to trade advanced financial products. The stock trading platform is currently part of Denmark's Saxo Bank, and now uses that name in the Netherlands.

Companies that allow customers to trade stocks and financial products must have policies in place to offer those products to the proper target groups. This can prevent people with less knowledge from trading high-risk products that they do not fully understand, which could potentially result in them losing a significant amount of money.

That policy was "insufficiently elaborated" at BinckBank, according to the AFM. As a result, BinckBank "could not guarantee that it only offered investment products that were in the interest of its customers."

In the middle of last year, BinckBank an order was already imposed on the company which subjected them to periodic penalty payments of another 500,000 euros. Since then, the broker has adjusted its policy so that it complies with European rules and that fine did not need to be paid.

BinckBank will therefore still be fined for the violation between December 2019 and December 2021. The AFM argued that the bank wrongly postponed policy changes until the platform was merged with that of Saxo Bank.

Saskia Klep, who heads up Saxo Bank Nederland, said she is closing "this chapter" and wants to look to the future again. "We went through and completed this process in close consultation with the AFM. The most important thing for all parties involved is that the guidelines are met."