Cabinet Secretary, National Treasury and Planning;
The Board of Directors and Management of EGM Securities;
Capital Markets and Private Sector Stakeholders;
Representatives from the Government;
It is my pleasure to be part of this landmark occasion as EGM Securities becomes the first registered Online Forex Broker in Kenya. Today marks a new beginning with online forex trading in Kenya firmly operating within a clear regulatory framework.
The timing of this event is all the more appropriate given the Authority will be launching our strategic plan for the period of July 2018 to June 2023 tomorrow morning in the presence of His Excellency the President of the Republic of Kenya. That plan is focused on promoting increased product availability, regulatory framework responsiveness and the leverage of technology across the capital markets value chain.
Ladies and Gentlemen, we commend EGM Securities for taking a firm stance to drive innovation in a sustainable and transparent manner within a clear framework for accountability. We remain confident that Kenyan Fx CFD investors will take note that they no longer need to turn to sometime opaque offshore platforms to receive world class product access.
Today is the culmination of a concerted journey by our National Treasury to afford Kenyans local platforms to participate in these increasingly vibrant global markets through the enactment of the Capital Markets (Online Foreign Exchange Trading) Regulations, 2017.
As the regulatory entity charged with market oversight by that framework we are certain that the launch and successful commencement of operations of EGM Securities will herald a new direction in the way online forex trading is conducted in Kenya.
The Regulations require licensing of the following players:
- Dealing Online Foreign Exchange Brokers;
- Non-dealing Online Foreign Exchange Brokers; and
- Money Managers.
Ladies and gentlemen, Kenya isregarded internationally as a technologically sophisticated market by regional standards on that back of transformational products like MPESA and M-Akiba. Today’s launch adds yet another technology driven product to the Kenyan market and further concretizes Kenya’s position in Fintech innovation.
The launch of regulated online forex trading is very well aligned to the Capital Markets 10 Year Masterplan’s focus to stimulate innovation, to broaden product and service offerings, deepen market participation and liquidity, and drive transformative economic development. The Capital Markets Authority is alive to the huge potential that financial technology and innovation affords our emerging markets to leapfrog more developed capital markets in delivery services, products and infrastructure in ever more responsive ways.
Ladies and Gentlemen, the opportunities for innovation nonetheless are fraught with an equivalent level of risks which reinforces the importance of intermediaries having due regard to the best interests of consumers and upholding the integrity of the financial services industry.
A regulatory license is a clear proof of a broker commitment to adherence to and compliance with regulatory requirements specified. This is very fundamental in order to promote the efficient, fair and orderly operation of the financial markets.
It is for this reason that the Capital Markets Authority urges members of the public who wish to participate in Online Foreign Exchange Trading to deal only with licensed entities. This way, they will have clear avenues of recourse in case of a complaint, which are not available when dealing with un -licensed firms.
Ladies and Gentlemen, Efficient market functioning is dependent on the conduct of each market participant within this space. The market is fast evolving, compelling regulators to act with haste to support its strengthening while upholding market transparency and integrity.
We now welcome global best practices in the conduct of online forex trading which includes:
- A strong culture of ethical behaviour and standards of conduct;
- Promotion of awareness and use of general dealing practices, procedures, and conventions;
- Ensuring accurate and timely pre-trade preparation and trade capture;
- Robust and efficient back office operations including Confirmation, netting, payment, and settlement; and
- Efficient risk mitigation.
As I conclude, I wish to reiterate the Authority’s commitment and support in conjunction with The National Treasury and State Department of Planning towards laying the necessary policies and frameworks to ensure that there is an enabling environment to facilitate the growth and development of the Capital Markets.
I wish to extend my sincere appreciation to the stakeholders present for their continued support to the Authority in ensuring growth and development of Kenya’s Capital Markets.
On behalf of the Authority I wish to commend EGM Securities for this major achievement and wish you the very best as you commence this journey.