KENYA Law and Practice Contributed by: Sammy Ndolo, Njeri Wagacha, Brian Muchiri and Sara Ndei, Cliffe Dekker Hofmeyr incorporating Kieti Law LLP
• funds are received from a payer for the sole purpose of transferring a corresponding amount to a payee or to another payment service operator acting on behalf of the payee; or • funds are received on behalf of and made available to the payee. The CBK currently requires PSPs to obtain a money remittance licence for cross-border transactions. This is because the NPS Act does not explicitly address PSP involvement in such services. To avoid confusion and ensure smooth operations, clearer regulations are needed to address this gap in the legislation. In addition, banks and deposit-taking microfi - nance institutions are exempted from the Mon - ey Remittance Regulations and can undertake cross-border payments and remittances without the need to obtain a money remittance licence. 6. Marketplaces, Exchanges and Trading Platforms 6.1 Permissible Trading Platforms Different types of marketplaces and trading plat - forms are permitted in Kenya with respect to the trading of securities. These marketplaces and trading platforms are regulated by the CMA and include the following. • Securities exchange: a formal marketplace where various securities are bought, sold or exchanged. Tradeable securities on an exchange encompass shares, debt securities, government securities, warrants, options, futures, units in a CIS, depository receipts and asset-backed securities. • Derivatives exchange: a CMA-licensed securities exchange specifically designed
for the listing of exchange-traded deriva - tive contracts. These standardised financial instruments derive their value from underlying assets, indices or interest rates. • Commodities market: a regulated market - place, licensed by the CMA or equivalent authority, facilitating the buying, selling or trading of commodity contracts. This market can operate in a physical or electronic format. Tradeable commodities include agricultural, livestock, fishery, forestry, mining or energy goods and related manufactured/processed products, financial instruments, indices, rights or interests tied to such commodities. • Over-the-counter (OTC) securities exchange: a decentralised market where securities not listed on a formal exchange are traded directly between participants (usually through a broker-dealer network). OTC markets are typically less regulated than traditional exchanges. • Online foreign exchange platforms: internet- based systems managed by online foreign exchange brokers that enable the trading of foreign currencies, including contracts for difference (CFDs) based on foreign underlying assets. 6.2 Regulation of Different Asset Classes The different assets tradeable on the platforms and marketplaces listed in 6.1 Permissible Trad- ing Platforms are regulated by the Capital Mar - kets Act and the regulations issued thereunder. The regulations issued under the Capital Mar - kets Act in relation to derivatives, asset-based securities, commodities and CFDs each set out how the assets should be traded in the respec - tive exchanges and platforms, and the obliga - tions of market intermediaries in dealing with the assets.
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