The Capital Markets Authority of Kenya or CMA has warned against engaging in online foreign exchange trading through unlicensed platforms.
The CMA, an independent government financial regulatory agency stressed to citizens of Kenya not to invest with unauthorized entities. If they do, they can be at risk of losing their investments because the law does not protect them.
The Kenyan regulator warned that all online FX brokers or money managers operating in the country should have proper license. Otherwise, they need to cease and desist from trading and onboarding clients from Kenya.
At present, there are only three trustworthy brokers in the country: EGM Securities, SCFM Limited, and Pepperstone Markets.
A statement said the Authority will take appropriate action against any persons or entities illegally conducting online foreign exchange trade. This includes collecting client funds in contravention of regulatory provisions.
Those who have been affected or become aware of illegal online forex transactions are advised to report to the Authority. They may also report to the Capital Markets Fraud Investigation Unit.
The CMA Regulates Online Forex
The CMA is starting to build a regulatory framework for the retail trading industry in the country. In July 2016, it announced a set of rules that brokers would have to adhere to. It had introduced amendments to the Capital Markets Act.
Aside from caps of 400:1 on leveraged trading, dealing brokers must also have capital holdings of 50M shillings or $490,000. For non-dealing brokers, 30 million shillings or $300,000.
Brokers operating in the country with foreign regulatory license must provide a letter from that regulator, addressed to the CMA. It then confirms that it is indeed licensed. It is also a confirmation that the foreign regulator is not in opposition to the company operating in Kenya.
EGM Securities was the first to acquire a forex broker license in Kenya and will continue to support its community.
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