Execution Point Limited sets to reap big from online currency license
The sole trader allowed to operate accounts which Kenyans can use to bet one currency against the other is set to reap a major windfall. Currently, the currency market is witnessing massive volatility, with the dollar losing ground against most currencies including the shilling.
It is estimated that the Kenyan online currency trading market has up to 50,000 people, including brokers, dealers and money managers who can now only use Execution Point Limited alone legally. CMA has pushed back against independent currency traders operating online to avert money laundering, fraud, and shilling volatility.
It is unclear whether only one firm applied since the Capital Markets (Online Foreign Exchange Trading) Regulations, 2017 came into force or whether other applications are being processed.
Execution Point Limited will only offer a platform to buy and sell currencies for investors but not directly trade buy its own currency for speculation. Clients deposit their investment amount with an account to be offered by the broker.
The trader (client) is responsible for executing trades – buying and selling of any products on the platform and the requisite risk assessments are undertaken to determine the suitability of clients to participate in online forex trading.The online Forex broker will also not be allowed to offer client advice or trade on behalf of their clients.
When opening a Forex trading (FX) & Contract for Difference (CFD) account, an investor agrees to exchange the difference between the opening price and the closing price of the FX or CFD position with the Broker.
CFDs offer a simple method to speculate on different markets without owning the underlying asset on which the contract is based.
This is different from Forex Bureau business where parties actually hold the foreign currencies being exchanged based on spot exchange rates.
