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Unlicensed e-traders to face the law

Zachary Ochuodho @zachuodho

The Capital Markets Authority (CMA) has warned Kenyans that they risk losing their investments by running unlicensed online foreign exchange trading platforms not protected by law.

CMA has also cautioned all online foreign exchange brokers or money managers not licensed by the authority to desist from trading, sensitising the public in Kenya and onboard Kenyan investors or managing online foreign exchange portfolios.

CMA chief executive Paul Muthaura said that the Authority has oversight over all entities offering online foreign exchange brokerage services in Kenya, which includes supervision of such entities.

Muthaura said that several individuals and entities are carrying on or purporting to carry on the business of an online foreign exchange broker or a money manager without the relevant licences by the Authority.

“In accordance with provisions of Section 23(1) of the Capital Markets Act and the Capital Markets (Online Foreign Exchange Trading) Regulations, 2017, the CMA has issued only one licence to EGM Securities Ltd (formerly Execution Point Ltd) to operate as a Non-Dealing Online Foreign Exchange Broker,” said Muthaura.

Section 23 (1) of the Capital Market Act states that no person shall carry on business as online forex broker or hold himself out as carrying on such a business unless he holds a valid licence issued under this Act or under the authority of this Act’.

He said that the Authority will take action against any persons or entities illegally conducting online foreign exchange trade or collecting client funds in contravention of the above regulatory provisions.

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

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