Exness Obtains FX Broker License in Kenya
Exness, a multi-regulated FX and CFD platform, has obtained an FX brokerage license in Kenya.
Exness joins a handful of non-dealing online forex brokers that have been licensed by the Capital Markets Authority (CMA) over the past two years. Notable entrants to the African forex scene include HotForex, EGM Securities Ltd (FXPesa), which received its first license in 2018, followed by SCFM Ltd (Scope Markets) in 2019 and Pepperstone in 2020. Exinity Capital East Africa Limited, which was founded by Andrey Dashin, owner of brokerage firms Alpari and FXTM, also got a similar endorsement less than two years ago.
This brokerage license allows Exness to provide its clients with access to the currency markets, but without engaging in market making or managed account activities.
Exness acquired its regulated UK license, a €730,000 IFPRU company, in 2016 to operate a CFD brokerage business. The broker launched a primarily retail offering, focusing on Forex and Commodity CFDs. In light of an internal business decision to restructure its business and focus on other markets to expand its B2B operations, Exness decided in 2019 to close the retail business in the EU/EEA region, including included in the UK.
At the time, Exness said one of the reasons for launching its institutional trading arm was recent changes in the regulatory environment. Indeed, the retail FX market in Europe is becoming relatively challenging for many platforms, which is why many brokers are investigating new opportunities in the wholesale liquidity and clearing market.
Oversight of online FX brokers falls under the CMA
The addition of this coveted license expands the group’s regulatory arsenal to include regulated companies authorized by the Seychelles Financial Services Authority (FSA), Mauritius Financial Services Commission (FSC), Cyprus Securities and Exchange Commission (CySEC), the Financial Conduct Authority (FCA) in the UK and the Financial Sector Conduct Authority (FSCA) in South Africa.
Applicants seeking a forex license in Kenya must be a company limited by shares, have a minimum capital of 30 million Kenyan shillings ($277,000) and maintain the minimum capital at more than 5% of debts owed customers above this amount. In addition, the company must ensure that 80% of its capital is in the form of cash or cash equivalents.
Applicants that operate as an affiliate of a regulated foreign exchange company are required to provide evidence to confirm the existence of such a relationship. In addition, its parent entity must provide a letter from that regulatory body confirming that it is not only licensed but also in good standing and that there are no objections to operating in Kenya.