Checking a broker in the local register
What you learn in 3 minutesThis lesson shows you how to check whether a broker is allowed to offer you forex and CFD trading in Kenya, and what the answers in the register actually mean for your money.
Two readers, KSh 50,000 each
| Step | Amount | Note |
|---|---|---|
| Reader A: checks the register before sending money | KSh 50,000 | full amount stays with the reader while the check is done |
| Reader A: finds the firm is licensed for the product offered | KSh 50,000 | the reader can then decide, with the licence known |
| Reader B: does not check the register | KSh 50,000 | sends the amount on the strength of an advert alone |
| Reader B: later finds the licence does not cover the product | KSh 50,000 at risk | the firm was on the register, but not for this activity |
| Difference between the two outcomes | KSh 50,000 | the check itself costs nothing |
A licensed firm may still charge spreads, commissions or conversion costs on top, and these vary between brokers. A licence does not remove market risk.
The mistake people make here
The common mistake is to see a firm's name somewhere on a regulator's website and stop there. A firm can appear on a register for one activity, such as insurance or fund management, while the forex and CFD product you were offered is not covered by that entry. Read the exact licence category and the exact product names, not just the company name. If the entry does not match what you were sold, treat the licence as absent for that product. Write down the date you checked and the page you used, because registers change over time.Check yourself
You plan to send KSh 30,000 to a broker. You check the register and find the firm listed, but the licence category is for a different activity. What should you do, and what does the KSh 30,000 represent?
Do not send the money for this product. The KSh 30,000 stays with you, because the licence shown does not cover what you were offered.
EUR/USD is around 1.0850. One pip on one standard lot is 10 units of the quote currency. If you hold 0.10 lots, what is one pip worth in the quote currency, before any conversion to KSh?
0.10 lots is one tenth of a standard lot, so one pip is 10 x 0.10 = 1 unit of the quote currency. Converting that to KSh depends on the rate your broker uses, and that rate varies between brokers.
In Kenya
- Regulator
- The Capital Markets Authority (CMA) is the regulator for investment services in Kenya.
- Where the register is
- The CMA publishes a list of licensed and approved firms on its own website.
- What to type
- Search the exact firm name, then read the licence category and the products listed.
- What to record
- Note the date you checked and the page you used, because entries can change.
- Funding
- Deposits and withdrawals are commonly made by M-Pesa or bank transfer, and the methods offered vary between brokers.