Saxo Bank says will revisit Swiss franc trades, clients may suffer

LONDON, Jan 15 (Reuters) - Denmark's Saxo Bank, one of the biggest players in retail foreign exchange trading, will potentially set different rates for transactions conducted after the Swiss National Bank's shock removal of its 3-1/2 year old cap on the franc.

Saxo, an unlisted and privately controlled company, said in a statement it had filled client orders in an "extremely illiquid market" around the shock move on Thursday, already seen as having generated potentially huge losses for some investors.

"Once we are better able to establish the market liquidity, all executed fills will be revisited and amended to more accurate levels," Saxo Bank said in a statement. "This may result in a worse execution rate than the originally filled level."

Another player in the retail space, London-based interdealer broker IG Group (Other OTC: IGGHY - news) , said many clients were able to close out their Swiss franc positions with IG (LSE: IGG.L - news) more swiftly than the broker itself managed to close out its hedged positions on the currency in the forex markets. It forecast it would take a hit of around 30 million pounds.

In what some traders termed "carnage" in the market, hedge funds in particular were seen as having suffered huge losses. On the main system for trading between the major banks, EBS, one miss-hit saw the euro quoted at 0.0015 francs, having spent the last few years ranging between 1.20 and 1.21 francs.

Currency trading platform Forex.com, the trading arm of Gain Capital (Other OTC: CGHC - news) , also briefly suspended trading in Swiss francs on Thursday due to a surge in the currency's volatility.

IG shares ended 4.4 percent lower at the London Stock Exchange. (Reporting by Anirban Nag, Eric Burroughs and Patrick Graham; Editing by Susan Fenton)