Exness awarded FX broker license in Kenya
Exness, a multi-regulated foreign exchange and CFD platform, has been granted an FX brokerage license in Kenya.
Exness joins a handful of non-dealing online foreign exchange brokers that were licensed by the Capital Markets Authority (CMA) over the last two years. The notable entrants into the African forex scene includes 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 companies Alpari and FXTM, also secured a similar approval less than two years ago.
This brokerage license allows Exness to provide its clients with access to currency markets but without being engaged in market-making or managed accounts activities.
Exness acquired its regulated UK license, an IFPRU €730K firm, back in 2016 to operate a CFDs brokerage business. The broker launched a mainly retail offering, which focused on CFDs in Forex and commodities. In light of an internal business decision to restructure its business and focus on other markets to grow their B2B operations, Exness decided in 2019 to close the retail business in the EU/EEA region, including in the UK.
At the time, Exness said that one of the reasons for the launch of its institutional business arm is the 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 looking into new opportunities in the wholesale liquidity and clearing market.
Oversight of Online FX brokers Came under CMA
The addition of this coveted license extends the group’s regulatory arsenal to include regulated companies authorised by the Seychelles Financial Services Authority (FSA), the Financial Services Commission (FSC) of Mauritius, the Cyprus Securities and Exchange Commission (CySEC), the Financial Conduct Authority (FCA) in the UK, and the Financial Sector Conduct Authority (FSCA) of South Africa.
Applicants seeking a forex license in Kenya must be a company limited by shares, have a minimum capital of 30 million Kenya shillings ($277,000), and maintain the minimum capital at plus 5 percent of liabilities owed to customers in excess of this amount. In addition, the firm has to ensure that 80 percent of its capital is in form of cash or equivalents.
The applicants that operate as a subsidiary of a regulated foreign forex firm are required to provide proof to confirm the existence of such a relationship. Additionally, its parent entity must provide a letter from that regulator confirming that it is not only licensed but also in good standing and that there is no objection to operate in Kenya.