Latest reforms in line with the Capital Markets (Coffee Exchange) Regulations, 2020
The Capital Markets Authority (CMA) has approved five coffee brokers to carry out the role of coffee brokerage services at the Nairobi Coffee Exchange (NCE) with effect from July 1, 2021.
Meru County Coffee Marketing Agency Limited has been granted a full coffee broker licence while Kipkelion Brokerage Company Limited, Murang’a County Coffee Dealers Company, Mt Elgon Coffee Marketing Agency Limited and United Eastern Kenya Coffee Marketing Company Limited have been granted conditional licences. They are expected to come into full compliance with the requirements of the Coffee Exchange Regulations within the next three months.
CMA chief executive Wyckliffe Shamiah said that the authority is fully supportive of the reforms in the coffee subsector and is ready to execute its mandate as envisaged in the regulatory framework.
“These conditional licenses are our commitment to ensuring that the trading of coffee continues at the NCE without disruption even beyond the 30 June 2021 deadline,” Shamiah said, adding that the NCE’s in-principal approval has since been extended to 31 December 2021 to enable the coffee exchange to come into full compliance with the regulatory requirements.
This comes after the Coffee Exchange Regulations together with the Crops Coffee General Regulations, 2019 provided that the NCE and coffee brokers are to be licensed and supervised by the CMA with effect from 1 July 2020. The Authority is mandated to particularly regulate the coffee commodity market according to Section 11(3) of the Capital Markets Act.
In order to ensure that there is no disruption in the coffee value chain, the authority has granted an extension of 3 months to the marketing agents currently trading at Nairobi Securities Exchange for them to apply for the same licence. The NCE is also expected to competitively select a commercial bank to provide the direct settlement system for clearing and settlement of coffee proceeds during this period.