bgBonds
Commissions for bond trading
A Custody fee of 0.1% on a yearly basis is applied. The fee is calculated based on the nominal value of the client’s bond value at the last working day at the corresponding month.
| Trading Session | Time Zone | Commission | Min. Commission | |
|---|---|---|---|---|
| Australia and New Zealand | 09:00 – 17:00 | Tokyo | 0.20% | EUR 80 |
| Asia | 09:00 – 18:00 | Tokyo | 0.20% | EUR 80 |
| Central Eastern Europe | 08:00 – 17:00 | London | 0.20% | EUR 80 |
| Middle East and Africa | 08:00 – 17:00 | London | 0.20% | EUR 80 |
| European market (corporate and government) | 08:00 – 17:00 | London | 0.20% | EUR 80 |
| US market (government) | 22:00 – 16:00 | New York | 0.20% | EUR 80 |
| US market (corporate) | 09:00 – 16:00 | New York | 0.20% | EUR 80 |
| Latin America | 09:00 – 16:00 | New York | 0.20% | EUR 80 |
Bonds can be traded online 24/5 if the relevant underlying bond market is open. Trading hours will be limited to the daylight hours where liquidity in the relevant underlying bond market is best (i.e. European government bonds are open for trading in European hours).
Minimum trade size
Bonds have different minimum trading sizes which can be as high as 50k, 100k or 200k in the relevant currency. You can see the minimum trading sizes and increment on each bond under account > Trading conditions as well as on the trade ticket. However, there are bonds which trade in lower sizes, which may also be available (a minimum limit of 10k in € or $ on all online bonds).
Taxation on Bonds
ELANA Trading will not provide any advice on any tax issues related to any services. Clients are advised to obtain individual independent counsel from a financial advisor, auditor or legal counsel with respect to tax implications of the respective services.
Bonds as margin collateral
ELANA TradingSaxo Bank allows a percentage of the investment in certain bonds to be used as collateral for leveraged trading activities.
The collateral value of a bond position depends on the rating of the individual bond, as outlined below:
| Rating definition* | Collateral percentage |
|---|---|
| Highest Rating (AAA) | 95% |
| Very High Quality (AA) | 90% |
| High Quality (A) | 85% |
* as rated internally
Corporate action handling
Bond coupons
Governments Bonds for United States of America, United Kingdom, France, Canada and Germany: Coupon payment for these markets are made contractually on the announced pay date as per the terms of the security. Any discrepancy in the payment will be passed to client after the pay date should the terms change.
For all other markets: Coupon payment for other markets will be made once these have been received by ELANA.
Corporate Bonds: Coupon payment for other markets are made once these have been received by ELANA.
Bond redemption (maturity)
Governments Bonds for United States of America, United Kingdom, France, Canada and Germany: Maturity payment for these markets are made contractually on the announced pay date as per the terms of the security. Any discrepancy (debit or credit of funds) in the payment will be passed to client after the pay date should issue terms change between announcement date and the pay date.
For all other markets, payment for government bonds are made once these have been received by ELANA.
Corporate Bonds: Payment for government bonds are made once these have been received by ELANA.
Consent events
Such events are offered with all the relevant announcement details and options that are available to ELANA. Clients participating are consenting to a proposal by a third party or the issuer such as a change to the security terms.
Corporate actions with NON-SUPPORTED entitlements
Corporate actions events may result in entitlements in the product which cannot be supported. In case of such entitlements, an information only event will be advised to move the resultant entitlements to another broker upon receipt. ELANA Trading do not hold any liability on any losses or compliance arising. ELANA Trading advise clients to read the documents for the terms and conditions of the offer.
Currency options
Currency options are not extended to clients. When a currency option is announced within the framework of an event, the payment will be processed as per the denominated currency of the security listing.
Deletion of open orders as a result of corporate action
The day before a Corporate Action event is scheduled to take effect (the Ex-date), open orders are deleted for certain event types.
Disclosure events
Such events are offered where there would be a requirement by law of the country of incorporation of the issuer for tax purposes or if the issuer offers holders a fee for participation.
Drawing
Governments Bonds for United States of America, United Kingdom, France, Canada and Germany: payment for these markets are made contractually on the announced pay date as per the issuer. Any discrepancy (debit or credit of funds) in the payment, will be passed to client after the pay date if issue terms changes between the announcement date and the pay date. Proceeds include coupon and principal payment as per pool factor reduction.
For other markets, redemption payment for government bonds are made once these have been received by ELANA.
Exchange offer
For exchange offers, customers holding a position in their portfolio will have the possibility to elect prior to the deadline. Please note that any holdings that have elected to exchange, will be debited on the instruction deadline date and will be booked on a dummy security (represented by a LOCK symbol). This is to prevent elected holdings from being sold before the payment date. The exchange entitlement will be booked upon receipt from the agent.
In the case where scale back of exchange occurs, holdings not accepted will be unblocked and proceeds for the accepted exchange instructions will be booked upon receipt from the agent.
Inter market entitlements
In corporate actions, issuers may announce to offer resultant entitlements in different markets. In such cases, resultant entitlements first should be transferred and registered in the respective markets and after that will be available for trading. Such movements may take additional time. During the transfer period client entitlements will be blocked for trading.
Liquidation
Holdings in the liquidated company will be removed. Liquidation proceeds, if any, will be allocated upon receipt. Liquidation proceeds are processed in three different forms:
- Worthless removal of holdings: If the issuer announces the liquidation it may process the removal of the holdings without any proceeds. There is no guarantee of payment in case of liquidation.
- Partial removal of holdings with payment: Issuer may announce to remove the holdings partially, with proceeds calculated and determined in the meetings or by the court if applicable.
- Complete removal of holdings with payment: Issuer may announce to remove the complete holdings, with proceeds calculated and determined in the meetings or by the court as applicable.
Mandatory corporate actions entitlement
Mandatory corporate action events are processed on ex-date and which result in tradeable entitlement. However, in some cases pay date of the event is not confirmed or beyond the tradeable cycle. In such cases, Saxo Bank will process the entitlement to a dummy security to block the trading. Resultant entitlements will be booked to clients accounts as soon as received from agent.
Mergers & Mergers with elections
For mandatory mergers there are different outcomes:
- Cash (distributed on Pay-Date)
- Stock (distributed on Ex-Date with future value date)
- Mix of Cash & Stock (distributed on Ex-date with future value date)
For mergers with elections, clients have the possibility to elect prior to the deadline. Please note that any holdings elected to merge, will be debited on the instructions deadline date and will be booked on a dummy security. This is to prevent elected holdings from trading, the merger entitlement will be booked upon receipt from the agent.
In the case where scale back occurs, holdings not accepted will be unblocked and proceeds for the accepted merger, will be booked as soon as practical upon receipt from the agent.
New Positions in non-online traded Instruments
Sometimes a Corporate Action involves an instrument that is Non-Online Tradable with Saxo Bank. Under those circumstances, the procedures are as follows:
Positions in new instruments that are ‘Non-Online Tradable’, assigned resulting from a Corporate Action, are booked to the client’s account. The instrument will be added to the client’s account for reporting purposes only.
Partial redemption
Governments Bonds for United States of America, United Kingdom, France, Canada and Germany: Maturity payment for these markets are made contractually on the announced pay date as per the issuer. Any discrepancy (debit or credit of funds) in the payment will be passed to client after the pay date if issue terms change between announcement date and pay date.
For other markets, redemption payment for government bonds are made once these have been received by ELANA.
Corporate Bonds: Redemption payment for government bonds are made once these have been received by ELANA.
Payment in kind
Resultant entitlements which are paid as interest will be allocated on actual basis upon receipt from agent for the eligible holding as per record date. Such distributions will not be made in cash.
Special corporate action events
Special and infrequent Corporate Actions may occur within the corporate actions handling process. ELANA Trading will handle such Corporate Actions in the best interest of clients to the extent that time and operational process permits.
Taxes and fees on corporate actions
Taxes and fees may also occur on corporate actions other than cash dividends. When such taxes and fees occur ELANA Trading will pass to the clients’ account, as soon as received from agent.
Currency conversion
When the underlying currency of an instrument traded on margin is different than the currency of the account the net result of the closed position will be converted to the currency of the account. When trading stocks, the currency rate will be calculated when the trade is executed. The rate will be the current spot rate +/- 0.5%.
Margin Call
You must maintain the required margin collateral on ELANA Global Trader at all times. If at any time while a margin position is open, and the margin required to maintain that position exceeds the funds available for margin trading on the account, you are in breach of your contract. What happens if the required level of margin is violated?
- At 75% margin utilization – client will receive a message on the ELANA Global Trader platform informing him about the level of margin used.
- At 90% margin utilization – client will receive a message on the ELANA Global Trader platform informing him about the level of margin used and a warning that all margin positions will be closed if losses increase.
- At 100% margin utilization – ELANA Trading will, at its sole discretion and without consent from or prior notice to the client, force liquidate any of the client’s margin positions. Cash positions will not be closed.
