Brief Overview:
Kenya’s Capital Markets Authority (CMA), licenses and regulates all forex brokerage businesses under the Capital Markets (Online Foreign Exchange Trading) Regulations, 2017. Forex brokers provide currency traders with access to a trading platform that allows them to buy and sell foreign currencies. Scope and features of each license type:
Dealing online foreign exchange broker
- Open clients’ accounts;
- Provide a traders with trading platforms
- Provide access to market information that the clients may utilize in formulating their strategies;
- Monitor traders’ positions; or
- Provide end-of-day reports.
- Trade as principal and market maker
A non-dealing online foreign exchange broker:
- Avails a trading platform to their clients that enables the clients to trade from anywhere and at any time using their electronic devices.
- Provides access to global markets and also provides an opportunity for clients to educate themselves on the global financial markets. Non- dealing
- Do not offer client advice or trade on behalf of their clients.
- Clients deposit their investment amount with an account to be offered by the broker.
NB// The trader (client) is responsible for executing trades – buying and selling of any products on the platform and the requisite risk assessments are undertaken to determine the suitability of clients to participate in online forex trading.
A money manager
- Choose and manage investments prudently for his or her clients;
- Develop an appropriate investment strategy;
- Take positions in the market to meet the investment goals of the client;
Undertake financial analysis; and - Monitor foreign exchange portfolio investments on behalf of the client.
An online foreign exchange broker is prohibited from trading
- Currency pairs involving the Kenya shilling; and
- Binary options.
