ADVOKS GLOBAL · KENYA
The Capital Markets (Online Foreign Exchange Trading) Regulations
16. Standards of conduct
Edition: 2023-10-06 · In force
16. Standards of conduct
(1)An online foreign exchange broker may—(a)open clients' accounts;(b)provide a trading platform;(c)provide access to market information that the clients may utilize in formulating their strategies;(d)monitor traders' positions; or(e)provide end-of-day reports.(2)A dealing online foreign exchange broker may trade as principal and market maker.(3)A money manager shall—(a)choose and manage investments prudently for his or her clients;(b)develop an appropriate investment strategy;(c)take positions in the market to meet the investment goals of the client;(d)undertake financial analysis; and(e)monitor foreign exchange portfolio investments on behalf of the client.(4)An online foreign exchange broker shall not offer for trading—(a)currency pairs involving the Kenya shilling ; and(5)An online foreign exchange broker or a money manager, in the conduct of foreign exchange business, shall, at all times, act in accordance with the principles of best practice and, in particular, shall—(a)observe a high standards of integrity and fair dealing:(b)act with due skill, care and diligence;(c)observe high standards of market conduct;(d)seek from clients information about their circumstances and investment objectives which might be reasonably expected to be relevant in enabling the online foreign exchange broker or money manager to fulfill their responsibilities to the clients;(e)take reasonable steps to give every client any information needed to enable the client to make a balanced and informed investment decision, in a comprehensible form;(f)avoid any conflict of interest with clients and, where such a conflict unavoidably arises, ensure fair treatment of the client by complete disclosure or by declining to act while always ensuring the interests of the online foreign exchange broker or money manager are never unfairly placed above those of the client;(g)maintain adequate financial resources to meet the foreign exchange business commitments and withstand the risks to which the business is subject;(h)in the case of an online foreign exchange broker ensure that all clients' funds are held in a bank licensed under the Banking Act (Cap. 488);(i)in the case of an online foreign exchange broker, keep clients' funds segregated from its own funds and ensure that at no point shall the clients' funds be used for margining, hedging or as company assets, including where the company becomes insolvent;(j)apply stringent governance and risk-management procedures throughout the business including adoption of risk-management procedures to deal with stop losses, no negative accounts, double lock limited risk accounts, margin call and close out procedures;(l)organize and control internal affairs in a responsible manner and clearly separate its front office and back office functions;(m)have efficient procedures and arrangements for addressing complaints by clients;(n)have adequate arrangements to ensure that all staff employed by the online forex broker or money manager are suitable, adequately trained and properly supervised, and subjected to well-defined compliance procedures;(o)adopt and enforce written procedures with regards to communications with the public;(p)deal with the Authority in an open and co-operative manner and keep the Authority informed of anything concerning the online forex broker or money manager that might reasonably be expected to be disclosed to the Authority; and(q)comply with the requirements of these Regulations and shall inform the Authority immediately and in any case not later than twenty four hours in case of non-compliance.