Kenya’s CMA Warns Against Using Unlicensed FX Brokers

The Capital Markets Authority (CMA) of Kenya, an independent government financial regulatory agency, has warned its citizens against engaging in online foreign exchange (Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term) trading through unlicensed platforms.

Towards the end of March, the regulatory authority stressed to citizens of Kenya that if they invest with unauthorized entities, they are at risk of losing their investments and, therefore, may not be protected by the law.

At the same time, the Kenyan regulator warned that all online FX brokers or money managers that are operating in the country without the proper license need to cease and desist from trading and onboarding clients from Kenya.

At present, there are only three regulated brokers in Kenya - EGM Securities, which is the Kenya-based operations of Equiti Group, SCFM Limited, and Pepperstone Markets.

As Finance Magnates reported, EGM Securities was the first online regulated non-dealing online forex broker to launch in East Africa. The subsidiary of Equiti Group allows traders to invest in global macro opportunities such as forex, oil, gold, other precious metals, and commodities.

EGM Securities: we will continue to serve our community

Speaking to Finance Magnates on the warning from the CMA, Samwel Kiraka, CEO of EGM Securities, said: “This recent warning issued by the Kenyan regulator, the Capital Markets Authority (CMA), makes their position very clear."

"No forex broker can legally onboard Kenyan clients into any entity without an online forex license issued by the CMA. EGM Securities fully understands the concern of the CMA, and as the first regulated broker in the Region, we will continue to serve our community."

In its statement, the CMA said: "The Authority will take appropriate enforcement action against any persons or entities illegally conducting online foreign exchange trade or collecting client funds in contravention of the above regulatory provisions."

"Members of the public who have been affected or become aware of such illegal online foreign exchange transactions are advised to report to the Authority or to the Capital Markets Fraud Investigation Unit."