Two firms get online forex trade licenceThursday May 12 2022
Two foreign exchange service providers Tadenex Limited and Tradesense Limited have been licensed by the Capital Markets Authority (CMA), bringing the number of licensed online forex trading brokers to seven and money managers to two.
Tadenex Limited has been licensed to operate as a non-dealing online foreign exchange trading broker while Tradesense Limited will operate as a money manager under the regulation of the CMA.
“The Authority has noted a keen interest from Kenyans to participate in online forex trading and is pleased to grow the pool of non-dealing online forex trading brokers and money managers,” said Wyckliffe Shamiah, CMA chief executive.
Tradesense as a money manager is licensed to choose and manage investments for its online forex trading clients and develop appropriate investment strategies.
It will also conduct financial analysis and monitor forex portfolio investments on behalf of its clients.
As a non-dealing online foreign exchange broker, Tadenex will act as a link between the online forex market and its clients in return for a commission or mark-up in spreads.
The firm will not engage in activities such as buying and selling of foreign currencies or offering advice or trading on behalf of its clients instead will provide access to a trading platform, enabling them to trade.
Kenyans are increasingly gaining knowledge of opportunities abroad through foreign investments such as buying and selling currencies.
The CMA seeks to weed out a high number of fake websites and licensing of these companies has given investors room to tap into offshore markets safely, increasing the participation of local traders and brokers.
Online foreign exchange trading platforms give access to global markets and an opportunity for clients to educate themselves on the currencies and financial markets.
While online forex offers high returns, it also comes with major risks of loss, making it suitable for sophisticated and high-net-worth clients.
Forex trading has gained traction among young people who are digitally savvy and seek opportunities beyond mainstream asset classes such as bonds, stocks, and real estate.