Zachary Ochuodho @zachuodho

The National Treasury has gazetted two capital markets regulations on which structured commodities trading in Kenya will be pegged.

The two regulations are: Capital Markets (Commodities Markets) Regulations 2020 and Capital Markets (Coffee Exchange), Regulations 2020.

Capital Markets Authority (CMA) Acting chief executive, Wycliffe Shamiah said the regulations will facilitate licensing of commodity exchanges, commodity brokers and approval of clearing houses.

The regulations further provide for the governance, trading and conduct of business of commodity exchanges and commodity brokers, including the disclosure, compliance and reporting requirements. 

Shamiah said the Capital Markets (Coffee Exchange) Regulations 2020 provide for; incorporation of the coffee exchange; licensing of brokers; establishment and operationalisation of a direct settlement system for expedited and transparent payment of coffee sales proceeds.

Master Plan

Shamiah said the gazettement of the Commodities Markets Regulations is aligned to the objective of the Capital Market Master Plan (2014-2023). 

He said the development of structured commodities trading is expected to provide a transparent, efficient and structured trading system, quality assurance for commodities, efficient price discovery and in the long-term, facilitate improved export competitiveness for Kenyan commodities.

  Capital Markets Act was amended in 2016 to expand its mandate to regulate Spot Commodities Exchanges. 

The Authority and National Taskforce on the establishment of a Commodities Exchange and Coffee Sector Reforms Implementation Committee, developed the regulations to support the establishment of structured Commodities Exchange(s) in Kenya.