Second Non-dealing Online Foreign Exchange Broker Iincensed to Operate in Kenya

By Sharon Chweya

The Capital Market Authority has licensed SCFM Ltd as the second non-dealing online forex trading broker. This happens after EGM securities were first approved in 2008.

SCFM Ltd is under the full ownership of SM Capital Markets Ltd, a foreign exchange liquidity provider and registered as Cyprus Investment Firm (CIF) and licensed by The Cyprus Securities and Exchange Commission.

The approval by CMA came to pass after the enacting of the Capital Markets Online Foreign Exchange Trading Regulations in 2017.

SCFM Corporation is licensed by the CMA to act as the intermediary between the online foreign exchange market and an investor. Among other

SCFM Limited will receive a commission or mark-up in the bid and offer spreads from the investors. However, the non-dealing online foreign exchange is obliged to not participate in any market activities such as buying and selling of investment vehicles.

SCFM will not offer advice to investors or aid indirect investment, but rather provide a worldwide market for investors to buy and sell the financial instruments. The off-dealing online foreign exchange acts as an e-market for investors to trade from any geographical location and at any time.

The investor deposits funds from their debit or credit accounts offered by SCFM Ltd. Some investors do a “Society for Worldwide Interbank Financial Telecommunication” (swift) to deposit cash to the broker’s account. The clients are wholly responsible for their investment decisions and prompt risk assessment.

The Forex market acts as a decentralized over-the-counter market for buying and selling of currencies and normally assumed to be the most liquid and most dynamic market in the world.

The CMA has previously given warnings on trading unregulated products in the market and other unregulated initial public offerings.

Online forex trading has a higher risk than fixed securities and therefore investors are warned of the numerous uncertainties involved.