Coffee Broker Licensing in Kenya: CMA Requirements Under the Coffee Exchange Regulations

Coffee broker licensing in Kenya sits under its own dedicated rules, not the general capital markets licensing framework for stockbrokers and investment banks. The Capital Markets Authority (CMA) licenses coffee brokers under the Capital Markets (Coffee Exchange) Regulations, and since March 2026 the Coffee Act has confirmed that no one may offer brokerage services at a coffee exchange without a CMA licence. This guide covers what the Regulations require and what changed in 2025 and 2026.

The governing law for coffee broker licensing

The Capital Markets (Coffee Exchange) Regulations are Legal Notice 40 of 2020, published and commenced on 3 April 2020 under the Capital Markets Act. A “broker” is a person cleared by the exchange and licensed by the Authority, who may be appointed by a coffee grower or an association of growers to sell their coffee through the exchange. Part III (regulations 7 to 18) covers brokers. Regulation 7 says a person must not carry on or purport to carry on business as a coffee broker unless licensed by the Authority.

The Coffee Act, 2026 (Act No. 8 of 2026, commenced on 27 March 2026) now repeats the position. Section 29 lists the licences issued by CMA under the Capital Markets Act: a coffee exchange licence and a broker’s licence authorising a person to offer clean coffee for sale at an exchange on behalf of the grower. Section 30(2) bars anyone from offering brokerage services at an exchange without a CMA licence, and section 30(3) makes a breach an offence punishable by a fine of up to KES 5 million, imprisonment of up to three years, or both. Section 28 also stops a commercial miller, or an entity associated with one, from carrying on the business of a broker. We did not find a provision in the Act that revokes the CMA Regulations, so we treat them as continuing, but confirm this with CMA before you file.

Application requirements

Under regulation 8 an applicant files Form B with:

• the prescribed fees;
• the documents, information and declarations required by regulation 9;
• a letter from the coffee exchange confirming that the applicant meets the exchange’s requirements and that the exchange will admit it if CMA licenses it.

The exchange letter makes this a dual gate. Regulation 9 requires the applicant to be a company limited by shares, with a chief executive officer who is fit and proper under section 24A of the Capital Markets Act and has at least five years of experience in buying, selling or dealing in coffee, commodities or other securities. It needs office infrastructure and trained staff, and fit and proper directors and key personnel. It must also hold the minimum net capital and net worth that the coffee exchange determines and CMA approves. The capital bar is set by the exchange, not by a figure in the Regulations.

Fees

The Second Schedule to the Regulations sets a coffee broker application fee of KES 10,000 and an annual regulatory fee of KES 50,000. Transaction and membership fees are covered below.

Timeline, validity and appeals

Under regulation 11, CMA must grant a licence within thirty days of the application if satisfied that the applicant is eligible. The licence remains valid until suspended or revoked, so there is no renewal date, only the annual fee. CMA cannot refuse a licence without first giving the applicant a chance to be heard. If it refuses after the hearing, it must communicate the decision, with reasons, within fourteen days of the hearing. The applicant may appeal to the Capital Markets Tribunal within fifteen days of receiving that decision.

Suspension, revocation and continuing duties

Regulation 13 lets CMA suspend a broker, after a hearing, for grounds that include breach of the Act or Regulations, false information, market manipulation or price rigging, financial deterioration that endangers investors and failure to pay the annual fee. Regulation 14 allows revocation, again after a hearing, for example for fraud or conviction, or where the exchange cancels membership.

Under regulation 15 a licence is automatically revoked, with no hearing, if the broker:

• ceases to be a trading member of a coffee exchange;
• is declared a defaulter and is not re-admitted within six months;
• is declared insolvent, is wound up by a court, or surrenders its licence or exchange membership.

A broker aggrieved by suspension or revocation may appeal to the Capital Markets Tribunal within fifteen days of notification (regulation 16). As a condition of continued admission, regulation 18 requires a certified net capital balance, net worth statement and auditor’s report to be given to CMA through the exchange each quarter, within thirty days of the quarter’s end.

Where the broker fits in a coffee sale

Under regulation 38, a miller deposits clean, graded coffee at a licensed warehouse, which issues a coffee warrant. When the owner acts through a broker, the owner gives the broker authority to sell, and the broker or miller invoices the successful bidder. Payment moves through the direct settlement system, and the prompt date is no more than five working days after the sale (regulation 40).

Fee regulations and the 2025 High Court ruling

The Capital Markets (Coffee Exchange)(Fees) Regulations, 2024 (Legal Notice 9 of 2025, commenced 30 January 2025) cap the transaction fee at 1.8% of the gross value of coffee sold, shared as 1% to the broker, 0.3% to the exchange, 0.3% to the direct settlement system provider and 0.2% to CMA. They also set an annual broker membership fee of KES 75,000, payable to the exchange.

In Kirinyaga Slopes Coffee Brokerage Company Limited & 2 others v Cabinet Secretary for the National Treasury and Economic Planning & another [2025] KEHC 16786 (KLR), decided on 17 November 2025, the High Court found that the making of the Fees Regulations violated the constitutional requirement of public participation. The court suspended the declaration of invalidity for six months so that public participation could take place, suspended the Regulations in the meantime, and said its order did not authorise their implementation in the interim. We have not found a later decision or a re-made set of fee regulations, so do not rely on the 1.8% cap or the KES 75,000 membership fee without checking their present status with CMA and the exchange.

Practical points before you apply

For coffee broker licensing, an independent applicant should show the exchange a credible pipeline of growers or cooperatives willing to sell through it, because the exchange letter is a mandatory part of the file. Confirm the minimum net capital with the exchange before incorporating. For wider financial regulation work, see our financial services practice and regulatory compliance team.

Frequently asked questions

This article is general information on Kenyan law as at its publication date, not legal advice. Reading it does not create an advocate and client relationship.