The National Treasury has introduced a regulatory fee on online forex brokers, in the latest review.
This was announced by the Treasury Cabinet Secretary Njuguna Ndung’u.
Further, Njuguna Ndung’u noted that forex brokers would now be required to remit an annual fee to the regulator.
The new fees on the brokers are set to be directed to the Capital Market Authority (CMA), providing an extra revenue stream to the regulator.
Further, the Treasury CS clarified the criteria which forex brokers will use to pay their dues.
“An online forex broker shall pay to the Authority an annual fee based on the gross trading revenue which shall include the commissions and rebates from third-party related service providers for that year, at the rate specific in the Third Schedule,” Njuguna Ndun’gu said.
Therefore, following development, foreign exchange traders whether dealing and non-dealing online will be required to pay up an annual three percent fee to the CMA.
This fee will be based on the gross revenue earned including commissions and rebates.
The relationship between Capital Markets Authority and Forex Brokers
In the country, the Capital Markets Authority (CMA), oversees Kenya’s licensing and regulation of forex brokers. Further, the CMA has established a regulatory framework that forex brokers in Kenya must comply with to operate legally.
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On this, the regulated forex brokers operate on different bases in the forex world.
Some of the forex brokers in the county include Fx Pesa, Pepperstone, Exness and HF Markets.
Furthermore, foreign exchange brokers offer a couple of different trading instruments other than forex such as indices and commodities.
FX Trading in Kenya
Forex trading in Kenya has quickly become one of the fastest ways to grow wealth.
Notably, engaging in forex trading in Kenya requires an investor to have a trading account.
Usually, most investors open trading accounts through a licensed forex broker.
However, an investor must perform due diligence to ensure that the brokers are registered by the Capital Market Authority and have a good reputation when it comes to serving clients.
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Forex Trading capitalizes on currency exchange.
Notably, forex traders speculate on changing exchange rates by converting large sums of money from currency to currency.
Just like in stocks, forex traders attempt to buy low and sell high for a profit. This is based on fluctuations of global currency prices.
However, on the other side of the coin, despite the prosperous nature of the trading market, the forex world is littered with risks which sometimes lead to massive losses.
