Nairobi — The Capital Markets Authority (CMA) has issued the first set of licenses to five coffee brokers in line with the Capital Markets (Coffee Exchange) Regulations, 2020.
In a statement, the Authority says the licenses will allow the brokers to carry out the role of coffee brokerage services at the Nairobi Coffee Exchange (NCE) effective 1 July 2021.
The Authority has granted a full coffee broker license to Meru County Coffee Marketing Agency Limited, while others, who include 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.
The Authority says the licensees are expected to come into full compliance with the requirements of the Coffee Exchange Regulations within the next three months.
The move is in line with the Authority’s mandate which includes regulating the spot commodity markets in Kenya and in particular, the coffee commodity market according to Section 11(3) of the Capital Markets Act.
The Coffee Exchange Regulations were gazetted by the Cabinet Secretary of the National Treasury and Planning on 3 April 2020.
The Coffee Exchange Regulations together with the Crops Coffee General Regulations, 2019 envisage that the NCE and coffee brokers are to be licensed and supervised by the CMA with effect from 1 July 2020.
However, the Coffee Exchange Regulations provided for a transitional period of one year for the NCE to come into full compliance.
Speaking on the approval, CMA Chief Executive Wyckliffe Shamiah noted, ‘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. As a result, 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.’ 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 NSE for them to apply for the coffee broker licence.
The Authority granted a provisional license to NCE on 1 July 2020 to continue operating in its existing form as it worked towards full compliance with the Coffee Exchange Regulations. Mr. Shamiah added 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. NCE is expected to competitively select a commercial bank to provide the direct settlement system for clearing and settlement of coffee proceeds during this period.
The Authority continues to work with the National Treasury and Planning, the Central Bank of Kenya, the Ministry of Agriculture, Livestock, Fisheries and Cooperative, Agriculture and Food Authority, NCE, the State Department for Trade, Council of Governors, County Governments, Coffee Cooperatives ,Growers, Unions, the Coffee Millers and Marketers, the Coffee Traders and other stakeholders through the coordination of the Coffee Subsector Reforms Implementation Standing Committee (CSRISC) which is domiciled in the Office of the President to support implementation of reforms in the coffee subsector.