Looking for the best CMA licensed forex brokers in Kenya? You came to the very best place as in the detailed review, I’ll be discussing the pros and cons of each forex broker that is licensed by CMA in Kenya.
In 2017, the Capital Markets Authority of Kenya (CMA) came up with regulations to regulate the forex industry in Kenya. Among its regulations is the requirement that forex brokers operating in the country need to get a license from the regulatory authority. The regulations made it an offence for a forex broker to accept Kenyan retail traders if the broker does not hold a valid license from the body.
However, it is not until recently that the body has started enforcing the regulations. The enforcement has seen good and reputable foreign brokers exit the Kenyan market. Among the two that have already exited the Kenyan market are TemplerFx and Tickmill.
TemplerFX stopped accepting new Kenyan clients by the end of June while Tickmill has announced that it will no longer accept Kenyan clients as from July 17th 2020.
The anticipated mass exodus of CMA-unregulated forex brokers in Kenya has led most traders to search for forex brokers regulated by CMA. I decided to do this article to serve as a reference point for people looking for CMA regulated forex brokers. I intend to keep the post up to date as more forex brokers comply with the CMA regulations and get licensed.
List of The Best CMA Licensed Forex Brokers
1. FxPesa – First CMA Licensed Forex Broker in Kenya
A question that a lot of Kenyans often ask is whether FxPesa is legit, and I can confidently vouch for this broker.
To start with, EGM Securities is a subsidiary of a large group of companies called the Equiti Group. Other subsidiaries in this group include Equiti Capital UK LTD, a forex and CFDs brokerage firm that is licensed and regulated by the Financial Conduct Authority (FCA), Equiti US, and EGM Futures DMCC that is licensed and regulated in UAE.
Fx Pesa Trading Fees: Fxpesa has relatively higher trading fees compared to other CMA licensed brokers. Spreads range from 1.5 to 1.7 pips for every standard lot such as EUR/USD. For high volume forex traders or scalpers, the trading fee can quickly eat into their profits. For the lowest trading fees, none other broker beats HotForex.
Deposits and Withdrawals at FXPesa: Being a locally licensed broker, FXPesa supports all major local deposit options including Mpesa, Airtel Money, Bonga Points Pay, and Eazzy Pay. You can also make deposits using Skrill or Neteller in addition to bank cards and direct bank transfer. Deposits and withdrawals using mobile payment options are free at FxPesa.
2. SCFM Limited / Scope Markets
In May 2019, SCFM Limited, trading under the brand name Scope Markets followed FX Pesa in the list of forex brokers regulated by CMA. The company started its operations in the country in November 2019, and has so far gone ahead to become the biggest competitor to EGM Securities.
However, unlike EGM Securities that has root abroad, SCFM Limited is a purely Kenyan company.
3. Pepperstone Markets
The 3rd and last CMA regulated forex broker in our list is yet to start operations in the country by the time of this writing. However, you can still sign up with Pepperstone Markets, which has its roots in Australia. The broker has been offering its services globally for the last 10 years, and its my number one recommended forex broker regulated by CMA in Kenya.
The main difference between Pepperstone and the other two brokers is that this is an Straight Through Processing (STP) forex broker. What this means is that the broker is able to offer tighter spreads than what you’d normally get with either EGM Securities or SCFM Limited.
What Does CMA Regulation Mean to You As a Retail Trader
There’s a lot of speculation on what the CMA really wishes to achieve with their new regulation directives. Some traders anticipate that this will pave way for the taxman to begin taxing retail forex traders in Kenya. But whether this is true remains to be seen.
If it comes to pass that there will be taxes imposed on Kenyan forex traders, it will be as easy as the taxman demanding that all registered forex traders provide their KRA pin certificates at the time of registration with the CMA regulated brokers.
Here are some things that will definitely change while all enforcement by CMA come into effect
Also Read: How to Choose the Best Forex Broker in Kenya
Lowered Leverage: According to the CMA regulations, all forex brokers are capped at offering a 1:400 leverage only. This is in plain contrast with some of the favorite foreign regulated brokers that can offer leverage as high as 1:2000
Binary Options Trading Made Illegal in Kenya: According to the CMA regulations, brokers registered in Kenya cannot offer binary options trading to Kenyans. This comes as no surprise as many nations around the world banned binary options trading.
On the brighter, suing a forex broker for malpractices will be easy as the CMA has these provisions in its regulations.
All forex brokers regulated by CMA will be required to submit any trader grievances to the CMA by the 15th of this month. This is a win for traders and will keep the brokers on their toes, unless they collude with the CMA to become corrupt.
Most of the CMA licensed forex brokers will accept Mpesa as a means to deposit and withdraw money from your trading account. Although there are a few forex brokers that accept Mpesa, we will be hoping that brokers operating locally will make the process much more seamless.