ADVOKS GLOBAL · KENYA
The Capital Markets (Coffee Exchange) Regulations
2. Interpretation
Edition: 2022-12-31 · In force
2. Interpretation
In these Regulations, unless the context otherwise requires—"Act" means the Capital Markets Act (Cap. 485A);"auction" means the auction system under which clean coffee is offered for sale at a coffee exchange and includes the place at which, or a facility by means of which, whether electronic or otherwise, offers or invitations to sell, buy or exchange coffee contracts are regularly made on a centralized basis, but does not include—(a)the office or facilities of a coffee buyer or service provider; or(b)or the office or facilities of a clearing house;"auction levy" means such fee per sixty-kilogram bag of coffee or other less volume of coffee sold at a coffee exchange, payable by millers, roasters and buyers;"Authority" means the Capital Markets Authority established under section 5 of the Act;"bid" means an offer to pay a particular amount of money for a given lot of clean coffee being offered for sale at a coffee exchange;"broker" means a person cleared by the exchange and licensed by the Authority, who may be appointed by a coffee grower or an association of coffee growers in accordance with the Crops (Coffee) (General) Regulations (sub. leg) to sell their coffee on their behalf through the Exchange;"coffee buyer" means an incorporated company licensed under the Crops (Coffee) (General) Regulations (sub. leg) to buy clean coffee at the exchange for export, local sale or value addition or to import clean coffee for secondary processing in Kenya;"clean coffee" means coffee bean or dried seed of the coffee plant separated from non-food tissues of the coffee fruit where the silver skin is reduced to the maximum possible extent;"clearing house" means an entity approved by the Authority, and recognized as a clearing institution on behalf of a coffee exchange, providing the services of clearing and settlement of transactions and guaranteeing settlement on behalf of the exchange;"clearing and settlement" means the procedure by which a clearing house acts as an intermediary between a buyer and seller for exchange traded transactions in order to reconcile orders between transacting parties and ensure the physical or financial settlement of the transaction;"coffee exchange" means a company incorporated under the Companies Act (Cap. 486) and licensed by the Authority as an exchange for trading in clean coffee;"coffee miller" means a person licensed under the Crops (Coffee) (General) Regulations (sub. leg) to conduct the business of coffee milling;"coffee roaster" means a person licensed by the respective county government to buy clean coffee under the Crops (Coffee) (General) Regulations (sub. leg) for value addition for local sale;"coffee sales proceeds" means monetary consideration received at the direct settlement system in exchange for clean coffee sold at an exchange or, where applicable, through direct sales;"coffee sample" means a small quantity of coffee, drawn out of a coffee lot to be a representative of that lot of coffee for purposes of display, testing, quality analysis, archiving, marketing or other legal purpose;"coffee warrant" means an instrument prepared by the warehouseman of which the person named therein, or the last endorsee thereof, shall for all purposes be deemed to be the owner of the coffee to which it relates;"collateral manager" means a person qualified under the Crops (Coffee) (General) Regulations and appointed by the warehouseman or any other person who has an interest in coffee stored in a warehouse with the intention of monitoring or taking custody of the coffee;"commodity" means clean coffee;"direct settlement system" means a banking facility provided by commercial banks regulated by the Central Bank of Kenya for clearing and settlement of coffee proceeds;"electronic warehouse receipt" means an authorized, verifiable and transferable warehouse receipt that has been generated, sent, received or stored by electronic, optical or similar means, conferring legal title to the depositor for commodities received in a licensed warehouse accredited by the Agriculture Food Authority;"grower" means any person who cultivates coffee in Kenya and may for purposes of licensing under the Crops (Coffee) (General) Regulations and includes co-operative societies, unions, associations and estates;"grower miller" means a grower licensed under the Crops (Coffee) (General) Regulations, who mills own parchment or buni or its members' coffee and includes a co-operative society, unions, association, estate or any other legal entity comprised of growers;"lot" means a saleable quantity of coffee specified in the sales catalogue designated for bidding;"marketing of coffee" means identification of competitive prices and facilitation of transactions relating to sale of coffee;"net warrant weight" means the net weight of coffee at the point of sale per lot after allowing for all required samples;"no bid" means a lot that has not attracted any bids at the auction;"out-turn number" means a reference number assigned by a coffee miller to a coffee consignment delivered to a mill;"prompt date" means a date specified in the sales catalogue and shall not be more than five working days from the date of the sale on which coffee sales proceeds are to be received by the grower through and from the buyer through the clearing house;"service provider" means a person who may have contractual dealings with the coffee growers and shall include cooperative societies, millers, warehousemen, transporters and financiers;"settlement account" means an account in the direct settlement system into which all coffee sales proceeds sold at the exchange are paid;"reserve price" means the price set as the minimum price before the auction by a miller in consultation with the grower;"sample deposit fee" means an amount of money payable in advance to an exchange, by buyers or roasters as security for collecting offer samples at an exchange, this being such an amount as may be determined by that exchange from time to time;"sample fee" means the price payable to an exchange by a buyer or a roaster for the offer sample collected at the sample room, based on the average price of coffee traded at that exchange in the month that the sample was collected;"sample room" means the physical space provided by an exchange for reception, display and distribution of coffee samples;"settlement bank" means a bank as defined under section 2 of the Banking Act (Cap. 488), approved by the Authority to facilitate the maintenance of a segregated account and to establish and operate a direct system for settlement and payment of coffee sales proceeds to growers;"sweepings" means the balance of coffee samples in the exchange sample room and spillages collected from millers' milling activities for sale at the exchange and the proceeds paid to growers on pro-rata basis;"sales catalogue" means a standard document prepared by a miller or a broker in consultation with the exchange for sale of clean coffee at the exchange;"sale" means the offering of clean coffee for sale;"trading floor" means the physical and electronic space and all the facilities including items, equipment, records and assets provided by or belonging to or in use by an exchange for purposes of coffee auction;"warehouse" means any building, structure or other protected enclosure duly licensed by the relevant authority to be used for the storage or conditioning of coffee for the purposes of trading at an exchange and is specifically designed to guarantee quantity, quality and safety of the coffee;"warehouse inspector" means a person empowered by the relevant authority to inspect warehouses and coffee kept therein to ensure that the warehouse operator complies with the law and the conditions of the operator's licence;"warehouseman" means a person duly licensed by the Agriculture and Food Authority to engage in the business of operating a warehouse for receiving, storing, shipping or handling coffee for the purposes of trading at an exchange; and"warehouse receipt" means a receipt issued by a licensed warehouseman in respect of coffee stored or handled in a licensed warehouse for the purposes of trading at an exchange, certifying that the specified coffee is of the stated quantity and quality and is located at the specified location, and includes an electronic warehouse receipt.