The Central Bank of Kenya (CBK) in a public notice has warned Kenyans against online foreign exchange trading through unlicensed entities, saying they risk being defrauded and losing money.
The CBK through its Banking fraud Investigations Department said their attention has been drawn to the emergence of unlicensed and unregulated online foreign exchange (forex) dealers platform.
“The purpose is to warn members of the public…They should only deal with genuine and licensed financial institutions and entities,” read part of the notice.
The regulator says the public needs to confirm the licensing status of forex dealers from them or the Capital Markets Authority (CMA) website.
According to the CBK, some of the characteristics of unlicensed dealers and platforms include:
They are downloadable on Google Play and App Store and aggressively market themselves; they purport to offer the best forex deals in the market.
Further, the alleged dealers do not have the requisite licence issued by CBK or the CMA.
Public Notice on Unlicensed Online Foreign Exchange Dealers. pic.twitter.com/tRGg3uPDJB
— Central Bank of Kenya (@CBKKenya) August 16, 2019
In Kenya, SCFM Limited, a fully owned subsidiary of SM Capital Markets Limited and a fully owned subsidiary of SM Capital Markets Limited and EGM Securities Limited are the only entities licenced to deal with online foreign exchange.
Non-dealing Online Forex Brokers avail a trading platform to clients to enable them trade from anywhere and at any time using their electronic devices. The platform provides access to global markets and also provides an opportunity to clients to educate themselves on the global financial markets. Non- dealing Online Forex brokers do not offer client advice or trade on behalf of their clients.
In 2017, the Capital Market Authority introduced legislation that would regulate the sector and also outline the registration requirements.