ADVOKS GLOBAL · KENYA
The Capital Markets (Coffee Exchange) Regulations
38. Process of trading at the exchange
Edition: 2022-12-31 · In force
38. Process of trading at the exchange
(1)The process of trading at the exchange shall be in accordance with these Regulations and shall comprise the following—(a)a miller shall deposit clean and graded coffee at a designated licensed warehouse, and where the clean coffee is a bulk, the respective coffee growers and the proportions of their coffee will be stated in writing;(b)the coffee shall meet defined quality standards for commodity trading at the exchange at which the coffee will be offered for sale;(c)the warehouseman shall issue a coffee warrant as set out in the Fourth Schedule or transferable warehouse receipts as the case may be, stating the quantity and quality of the coffee deposited and ensure traceability of the coffee;(d)the warehouseman shall guarantee delivery of the coffee described in the coffee warrant or warehouse receipt as the case may be, and in the event of loss or failure of delivery, the warehouseman shall be liable;(e)a coffee warrant or warehouse receipt as the case may be, issued shall be transferred to a new holder who is entitled to take delivery of the coffee upon presentation of the coffee warrant or warehouse receipt at the warehouse;(f)when the owner of coffee deposited in a warehouse decides to trade and is acting through a broker, the owner shall contact the broker and give authority to sell;(g)for purposes of sale, the miller shall input the details of the coffee warrant or warehouse receipt as the case may be, into the central registry of the exchange at which coffee will be offered for sale;(h)the collateral manager, where applicable, shall confirm that the warehouse receipt as the case may be, is valid by inspecting and auditing underlying commodities in warehouse;(i)upon verification, details in the central registry shall be confirmed into the central order book ready for trading;(j)once the sale of coffee is complete, successful bidders shall be invoiced by the miller or broker and payments of the proceeds shall be effected through direct settlement system net of contract and any statutory charges;(k)upon confirmation of payment by the direct settlement system provider and endorsement by the exchange, title to coffee shall be transferred to the buyer by changing ownership details in the coffee warrant or warehouse receipt, as the case may be, at the central registry; and(l)new owners will thereafter be at liberty to take delivery of the coffee.(2)The grower or the grower's agent shall set the reserve price for each lot in the sales catalogue.(3)An exchange shall not disclose the reserve price to a buyer, roaster or any other party whatsoever provided such reserve prices shall be disclosed to the Authority when requested.(4)In the event that the highest bid for any lot is equal to or higher than the reserve price it shall be confirmed.(5)Where the bid has not been confirmed, the miller or other agent of the grower shall disclose the reserve price at the trading floor.(6)Where the disclosure of the reserve price does not attract any competitive offers, the coffee shall be withdrawn and re-offered for sale at a subsequent auction.(7)A "No-Bid" lot shall be re-offered for sale at a subsequent auction.(8)All trading in coffee shall be concluded at the trading floor.