CMA Extends Approval to the Nairobi Coffee Exchange
Nairobi, 20 January 2023… The Capital Markets Authority (CMA) has extended the in-principle approval granted to the Nairobi Coffee Exchange (NCE) to continue operating as a coffee exchange to April 30, 2023. The approval had been extended to 31 December 2022.
The approval was granted in accordance with the Capital Markets (Coffee Exchange) Regulations, 2020, with the understanding that NCE will work towards full compliance with the Coffee Exchange Regulations. This is expected to give impetus to the ongoing coffee sub-sector reforms.
The CMA Chief Executive Officer, Mr. Wyckliffe Shamiah, observed that the key requirements for NCE stipulated in the Coffee Exchange Regulations include; Onboarding a Direct Settlement System provider to expedite and enhance transparency in settlement of coffee sale proceeds; Submission of trading rules aligned to the Coffee Exchange Regulations to guide the trading operations at the NCE; and strengthening the governance structure by reconstituting the NCE board to comply with the Capital Markets (Corporate Governance) (Market Intermediaries) Regulations, 2011.
Mr. Shamiah added that NCE is expected to immediately admit entities holding valid coffee broker licenses issued by CMA to the trading floor. The brokers holding valid licenses are; United Eastern Kenya Coffee Marketing Company; Meru County Coffee Marketing Agency Limited; Kipkelion Brokerage Company Limited; Mt. Elgon Coffee Marketing Agency; Murang’a County Coffee Dealers Limited; and Embu Coffee Farmers Marketing Agency Limited.
Mr. Shamiah said, ‘CMA continues to engage all stakeholders in the coffee sub-sector to ensure that the momentum of the reform agenda is sustained and gains traction towards full implementation of the Coffee Exchange Regulations. This is expected to ensure the marketing and trading mechanism at the Coffee Exchange promotes fair trade, is transparent and enhances price discovery, ultimately benefitting the coffee farmers.’
The CMA Chief Executive Officer also welc0med the recent decision by the Agriculture and Food Authority to withdraw the amendments to the Crops (Coffee) (General) Regulations, 2019 which had slowed down the reform process by removing CMA from regulating the marketing and trading aspects at the Coffee Exchange. The Capital Markets Act was amended in 2016 giving CMA the mandate to regulate spot commodity markets including the coffee commodity market. CMA regulates the structured spot commodity markets in Kenya and in particular, the coffee commodity market according to Section 11(3) of the Capital Markets Act. This ensures there is a clear regulatory framework to support the coffee sub-sector reform agenda.
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