Capital Markets Authority warns against unlicensed online forex trading

Kenya’s Capital Markets Authority (CMA) has warned against online foreign exchange trading through unlicensed entities as they risk losing their investments and may not be protected by the law.

CMA Chief Executive, Mr. Paul Muthaura, observes 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 license by the Authority.

“The Capital Markets Authority (CMA) has issued only one license to EGM Securities Limited (formerly Execution Point Limited) to operate as a Non – Dealing Online Foreign Exchange Broker,” Paul Muthaura, CMA Chief Executive said in a statement.

According to the Capital Markets Act, section 23 (1), ‘’ 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 license issued under this Act or under the authority of this Act’’.

As a result, CMA says it 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.