Nick Collison, founder and managing director of Saxon
Financials, the UK proprietary trading firm, has attributed the
firm’s decision to close its Warsaw office to the
financial crisis and the lack of market developments in the
Futures and Options Intelligence, the sister news service to
FOW, reported that Saxon would close the office, which was
opened in January 2008 and has 10 staff trading equity products
on Liffe, Eurex, the CME and the Warsaw Stock Exchange.
"The financial crisis makes it less of a proposition to have
the office over there and have split teams, at the moment doing
very similar things to what we’re doing from our
London and Madrid offices, which is looking at European
markets," Collison said.
Collison said one of the difficulties faced by Saxon was
having teams of algorithmic traders in different locations. "It
is better for them to be working under one team as opposed to
being split," he said.
Originally, Saxon tried to establish teams in various
countries to concentrate on local markets. In September 2008
Saxon Financials operated from London, Madrid, Dublin,
Singapore, Warsaw and Hong Kong, and was considering opening in
"People have opened offices in countries to trade into
Liffe," Collison said. "That isn’t our business
model. We want to know about the local markets and we want to
get connectivity to the markets. For us it was about
The Singapore team covers Asian markets while that in London
concentrates on Europe and America. "One of the reasons we
opened up in Warsaw was very much for the eastern European
markets," Collison said.
At the time Saxon began planning to open the Warsaw office
early in 2007, the Warsaw Stock Exchange was planning to update
its technology and conduct an IPO. There were also talks about
consolidation between exchanges in the region. One idea was
that Wiener Börse might take over the WSE.
Saxon was also interested in using Warsaw as a base for
getting involved in other east European markets, including
those in Russia and Turkey.
With the credit crisis such changes have not occurred, which
Collison said he finds "a little bit disappointing …
Some of the things that we thought were going to happen, and we
were led to believe were going to happen, just
didn’t happen. The whole reason for us being here
no longer exists. With the current model it just
doesn’t fit in," Collison said.
Gaining regulatory approval to access the Warsaw Stock
Exchange took a long time and Collison also pointed to
difficulties on the "tax side".
He dismissed, however, the suggestion that Saxon had faced
competition from OSTC, another UK proprietary trading firm with
offices in Poland. Collison said Saxon did not have a trading
bureau in "a similar sense" to OSTC.
"We’ve never competed with OSTC... They have a
very different model. Theirs is much more what I would describe
as market making, in as much as doing spreads and the like,"
Collison said. "We’ve pushed very much towards
"We’re building up to this launch where the
investment management side of the business will be coming to
fruition. We’re moving more towards a hedge fund
style of business than our existing prop group with day traders
Asked whether Saxon would consider setting up a new office
in Warsaw when circumstances change, he said: "If you looked at
Poland, as the country that probably is the best place for us
to operate out of, those reasons are still valid. Certainly we
would consider it but at this particular stage we
don’t see it changing that much.
We’re waiting to see how the whole of eastern
Europe plays out."
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