KENYA – The Capital Markets Authority (CMA) has granted full coffee brokerage licenses to three companies, allowing them to trade at the Nairobi Coffee Exchange (NCE).
The newly licensed brokers are Nandi Coffee Co-operative Union Coffee Brokers Limited, Meru South Coffee Marketing Company Ltd, and the recently reinstated Minnesota Coffee Importers Limited.
This expansion of licensed coffee brokers aims to boost the uptake of new commodities products and services and enhance market turnover.
“The Authority continues to implement coffee reforms at its level and as a member of the National Task Force on Coffee Sub-Sector Reforms. We see these reforms contributing to the uptake of commodity markets products and services while enhancing the experience of our customers in the coffee value chain,” said CMA CEO Wyckliffe Shamiah.
In addition to these new licenses, CMA has granted a six-month extension to New Kenya Planters Co-operative Union PLC (NKPCU), allowing it to continue operating as a conditionally licensed coffee broker.
This special license, valid until February 2025, enables NKPCU to broker coffee despite not being a grower.
The inclusion of these three brokers increases the total number of fully licensed coffee brokers in Kenya to 16.
The licensing initiative is part of government-backed coffee reforms implemented in recent years. Under these reforms, Kenya’s 47 county governments are responsible for licensing millers, while the CMA licenses brokerage firms.
These reforms have been accompanied by new trading rules at the NCE to curb malpractices on the trading floor.
The new rules are based on the Crops Regulations 2019 and the Capital Markets Regulations 2020, developed following recommendations by the 2016 National Task Force on Coffee Sub-sector Reforms.
Under the new regulations, the exchange will be managed by a board of directors established under the Memorandum of Association and Articles of Association Part III Section 3, and appointed according to the provisions of the Capital Markets Authority Act Cap 485(A) Part II Clause 10.
Coffee millers, roasters, and buyers will now be required to pay an auction levy, which includes charges per 60-kilogram bag of coffee or other volumes sold at the exchange.
This system manages a settlement account where all coffee buyers deposit sales proceeds, ensuring timely payment to growers and compliance with the new rules.
In cases of default by a buyer or roaster, the direct settlement bank will immediately issue a notification of outstanding payments and interest rates chargeable to the defaulter.
The defaulting buyer or roaster will be automatically suspended from the trading floor until they settle the outstanding amounts and interest in full.
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