Is Forex trading in Kenya legal?
Yes, Forex trading is legal as long as you transact with your own personal account and your own money. This is considered private transaction, and there are no laws in Kenya prohibiting this. As of the time of writing, the Central Bank of Kenya (CBK) does not regulate or “license” online Forex brokers, as you can see in their site’s FAQ section. Because the Forex market is globally accessible, thanks to the advent of the internet and online trading platforms, it is massively decentralized (Waters 2008) and Kenya happens to be one of the least restrictive locations in which to trade.
However, Forex trading does become illegal if you run somebody’s account on their behalf; this is something that the Central Bank does regulate, as it prevents the public from being defrauded. Only licensed banks and financial institutions have the legal right to handle other people’s money on their behalf.
Here you can see how the Central Bank licenses financial institutions, underlying the need to always trade your own money, and never on someone’s behalf.
Keep in mind that the Forex bureaus that the Central Bank does license and regulate, are a separate entity from online trading brokers. The Central Bank has this to say about bureaus:
Don’t confuse bureaus with Forex brokers; a Bureau de Change, or Forex bureau, is a licensed currency retailer that exchanges currency for those traveling in or out of Kenya. These ARE licensed and regulated by the CBK.Central Bank of Kenya
The laws around Forex trading in Kenya can appear murky, as legislation does not exist around the prohibition or regulation of private Forex trading as such. This lack of regulation does leave the market open to illegal activity, and so you have to be cautious and thorough when you decide to enter the trading environment. With zero government regulation comes a certain amount of freedom, and this is both a blessing and a curse for potential traders. Whether the Kenyan authorities will introduce regulation at any point in the future is still unknown, but for now you will not be breaking the law if you transact as a private citizen, with your own money.
Again, because this is an online, global market that is open to scammers and illegal operations, do your research and choose a broker who is regulated by their local financial institutions, well known and has a good reputation. Refer to our reviews of well-regulated brokers for a good start.
Central Bank of Kenya. (n.d.) Bank Supervision. Retrieved September 30, 2015 from https://www.centralbank.go.ke/.
Waters, Betsy. (August 14, 2008) The Rise of Retail Foreign Exchange. Retrieved September 30, 2015 from http://www.tradingmarkets.com/recent/the_rise_of_retail_foreign_exchange-640269.html.