A Non-Dealing Online Forex Broker Licence is required as Kenya’s online forex trading market has grown fast, and so has the regulatory framework around it. Any firm offering online foreign exchange brokerage services to Kenyan clients without the correct licence from the Capital Markets Authority (CMA) is operating illegally, regardless of where the firm is incorporated. This article sets out what a non-dealing online forex broker licence requires, who needs one, and the capital thresholds the CMA enforces.
What Is a Non-Dealing Online Forex Broker?
The Capital Markets (Online Foreign Exchange Trading) Regulations, 2017 create three licence categories: dealing online foreign exchange broker, non-dealing online foreign exchange broker, and money manager. A non-dealing broker links a client to the online forex market and earns its revenue from commission or spread mark-up, without taking the other side of client trades. This distinguishes it from a dealing broker, which can act as market maker, and from a money manager, which trades on behalf of clients under a separate mandate. Each category has its own capital and governance requirements, and a firm cannot rely on one licence to conduct the activities of another. Most offshore platforms seeking to serve Kenyan retail clients through a locally incorporated entity fall into the non-dealing category, since they typically route execution through a third-party liquidity provider rather than dealing as principal.
Capital Requirements
The thresholds are set out in the Regulations (Legal Notice 226 of 2017, as amended by Legal Notice 160 of 2023):
- Minimum paid-up capital, which must not be impaired, of Kshs. 30,000,000 for a non-dealing broker (Kshs. 50,000,000 for a dealing broker and Kshs. 10,000,000 for a money manager).
- Liquid capital maintained at all times at the higher of Kshs. 30,000,000 or 8% of total liabilities.
- For an applicant already operating in another jurisdiction, an undertaking to allocate and keep in Kenya an amount not less than the required minimum capital.
Some secondary sources quote lower figures. For the non-dealing category they should not be relied on; confirm figures against the regulation text before budgeting for an application.
Documentation and Governance Requirements
Beyond capital, the Regulations require a documentation package that is specific to forex broker and money manager licensing. It is separate from the Capital Markets (Licensing Requirements) (General) Regulations, 2025 (Legal Notice 197 of 2025) that govern other intermediaries. The package includes:
- A completed application form, certified incorporation documents, and a memorandum and articles of association permitting forex brokerage business.
- Accounts, or an auditor’s certificate for a newly established entity, and a business plan covering management, board, shareholding and financial projections.
- A Chief Executive who is fit and proper under section 24A of the Capital Markets Act, has at least five years’ experience in dealing in foreign exchange, foreign exchange futures or futures contracts, and belongs to a professional body.
- An accredited compliance officer, who may also act as the anti-money laundering reporting officer, and client-facing staff with the prescribed securities-industry qualifications.
- References, CVs, police clearance certificates and fit and proper forms for directors and key personnel.
Board composition is also tested under the CMA’s corporate governance rules for market intermediaries, including independence and audit committee requirements, so first-time applicants should map their board against those rules before filing.
Application and Annual Fees
The Second Schedule states an application fee of Kshs. 2,500 and an annual licence fee of Kshs. 100,000 for a non-dealing broker. The First Schedule, however, separately refers to an application fee of Kshs. 10,000. The two figures sit in the same consolidated text, so this is a drafting inconsistency, not a superseded figure; confirm the operative amount with the CMA before paying. Regulation 25A (added in 2023) also requires online forex brokers to pay an annual fee of 3% under the Third Schedule, on top of the flat annual fee.
The real cost of an application is assembling the package correctly the first time. Incomplete governance documents, unclear shareholding structures, or Chief Executive CVs that do not show five years of forex-specific experience are common causes of delay. Firms regulated elsewhere should expect to supply a letter of good standing from the home regulator.
Ongoing Obligations After Licensing
A non-dealing online forex broker licence is not a one-time approval. Regulation 15 imposes continuing obligations, including periodic returns on complaints, reconciliations, management accounts and capital adequacy. The Authority may suspend a licence under regulation 10 for grounds such as breaching licence conditions, failing to file returns, giving false information or failing to use the licence. Regulation 11 governs revocation, which is more serious, and regulation 12 provides for automatic revocation in defined cases, such as insolvency, surrender or winding up by court order.
The CMA also issued guidance in September 2023 to dealing and non-dealing brokers on client-loss disclosure and risk warnings in marketing material. Brokers should read it alongside the Regulations and build it into their compliance calendar.
Why This Matters Beyond the Licence Itself
The CMA has issued public cautionary notices against unlicensed online forex activity directed at Kenyan clients. For a genuine market entrant, the licence determines whether client funds can lawfully be held, whether marketing is lawful, and whether directors face personal exposure for running an unlicensed business. For context, see our overview of Capital Markets Authority licensing in Kenya, our guide to CMA money manager licensing, and CBK forex bureau licensing (a distinct, CBK-regulated category).
How We Can Help
Clay & Associates Advocates advises applicants and existing licensees on CMA forex broker licensing, from structuring the initial application through to corporate governance and AML compliance. We work directly from the regulation text and the CMA’s own checklists. Our regulatory and compliance practice can run a compliance health check on an existing licence; please contact us to discuss your application.
Sources: Capital Markets (Online Foreign Exchange Trading) Regulations, 2017 (Legal Notice 226 of 2017, as amended), Kenya Law; Capital Markets (Licensing Requirements) (General) Regulations, 2025 (Legal Notice 197 of 2025), Kenya Law; Capital Markets Authority, Guidance to all Dealing and Non-Dealing Online Foreign Exchange Brokers.
Frequently asked questions
What minimum capital does a non-dealing online forex broker need in Kenya?
Paid-up capital of Kshs. 30,000,000, plus liquid capital at the higher of Kshs. 30,000,000 or 8% of total liabilities, under the 2017 Regulations.
Can an offshore forex broker serve Kenyan clients without a CMA licence?
No. A firm offering online forex brokerage to Kenyan clients needs the appropriate CMA licence, wherever it is incorporated.
Is the licence a one-time approval?
No. Licensees must meet continuing obligations under regulation 15, and the CMA can suspend or revoke a licence on the grounds in the Regulations.
Which licence category suits a broker that routes orders to a liquidity provider?
Generally the non-dealing category, because the broker does not take the other side of client trades.
Need advice on your own matter?
Tell us what you are dealing with. You will know what it involves and what it costs before you commit.
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.
