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Watchdog to regulate 80,000 in forex trade

Online trading has grown tremendously. FILE PHOTO | NMG
Online trading has grown tremendously. FILE PHOTO | NMG 

Some 80,000 Kenyans are engaged in forex trade abroad facilitated by unregulated local brokers exposing them to numerous risks.

Capital Markets Authority (CMA) regulatory policy and strategy director Luke Ombara said the watchdog had established that 80 per cent of the Kenyans who invested money in UK were promised returns of up to 30 per cent. Others invest in Australia and in Mauritius.

“We are yet to know how much is involved but we have prepared a draft Bill that we presented to the Attorney General’s Office for review before it is forwarded to parliament for debate and eventually be enacted into law,” he said.

Mr Ombara spoke during the signing ceremony of a memorandum of understanding with the Association of Chartered Certified Accountants (ACCA) where the two agreed to partner and enhance investor education at the bourse.

The ceremony also witnessed the launch of two online portals on investor information (cmarcp.or.ke) and on financial literacy education (acca-x.com) aimed at enhancing Kenyans’ informed participation at the bourse.

Mr Ombara said online trading had been allowed to operate unregulated but had grown tremendously especially when Kenyan markets suffered a downturn, thereby making it necessary for regulation that will deter money laundering as well as help understand the amount of money involved.

“Two online forex traders are currently using our informal template to report their dealings while the others are unknown,’’ he said.

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