Derivatives trading in Kenya is an emerging segment of the financial markets, offering investors opportunities to trade contracts whose value is derived from underlying assets like stocks, commodities, bonds, and currencies. These financial instruments, known as derivatives, include options, futures, forwards, and swaps. Derivatives brokers serve as intermediaries in this market, connecting buyers and sellers while providing the platforms necessary for executing trades.
The Capital Markets Authority (CMA) is responsible for regulating and licensing derivatives brokers in Kenya, ensuring that these firms adhere to strict financial standards and safeguards to protect investors. As derivatives trading continues to grow, it is important for investors to work with licensed brokers who are authorized and monitored by the CMA to ensure secure and transparent trading.
What Are Derivatives?
A derivative is a financial contract whose value depends on the price movement of an underlying asset. The most common types of derivatives are:
- Futures Contracts: Agreements to buy or sell an asset at a future date at a predetermined price.
- Options Contracts: Contracts that give the buyer the right, but not the obligation, to buy or sell an asset at a specific price within a set time frame.
- Forward Contracts: Customized contracts between two parties to buy or sell an asset at a specified price on a future date.
- Swaps: Contracts where two parties exchange the cash flows or liabilities from two different financial instruments.
In Kenya, these derivatives provide investors with tools to hedge risk, speculate on future price movements, and diversify their portfolios.
Importance of Using Licensed Derivatives Brokers
Working with licensed derivatives brokers offers several benefits to traders:
- Security: Licensed brokers are regulated by the CMA, which ensures that these firms follow strict operational, financial, and ethical standards.
- Transparency: Licensed brokers offer transparent trading environments where all trades are recorded and monitored by the CMA.
- Access to Advanced Trading Platforms: Licensed brokers provide sophisticated trading platforms that allow investors to analyze markets, execute trades, and manage risk efficiently.
- Expert Advice: Licensed brokers often offer additional services such as market analysis and expert financial advice to help investors make informed decisions.
Full List of Licensed Derivatives Brokers in Kenya (2024)
The following is a comprehensive list of all licensed derivatives brokers in Kenya, along with their office locations and contact details:
| Derivatives Broker | Location | Contacts |
|---|---|---|
| 1. AIB-AXYS Africa Limited | The Promenade, 5th Floor, General Mathenge Road, Westlands, Nairobi | Phone: +254 711 047 000 |
| 2. EGM Securities Limited (Trading as “FX Pesa”) | 12th Floor, Tower 2, Delta Corner Towers, Waiyaki Way, Westlands, Nairobi | Phone: +254 730 676 002 |
| 3. Faida Investment Bank Limited | Crawford Business Park, State House Rd, Nairobi | Phone: 020 7606026 |
| 4. Genghis Capital Limited | 3rd Floor, Purshottam Place, Westlands Road, Nairobi | Phone: +254 709 185 000 |
| 5. Kingdom Securities Limited | Co-operative House, 5th Floor, Haile Selassie Avenue, Nairobi | Phone: 0703 027 000 |
| 6. SCFM Limited (Trading as “Scope Markets”) | Westside Towers, 4th Floor, Office 402 and 403, Lower Kabete Road, Westlands | Phone: +254 20500 5100 |
| 7. Standard Investment Bank Limited | 16th Floor, JKUAT Building, Kenyatta Avenue, Nairobi | Phone: 020 2277 000 |
| 8. Sterling Capital Limited | Delta Corner Annex, 5th Floor, Ring Road, Westlands, Nairobi | Phone: 020 2213914 |
| 9. NCBA Investment Bank Limited | Mara Road, Upper Hill, Nairobi | Phone: 020 2884000 |
| 10. Dyer and Blair Investment Bank Limited | 7th Floor, Goodman Tower, Off Waiyaki Way, Nairobi | Phone: 0709 930 000 |
| 11. SBG Securities Limited | Stanbic Bank Centre, 2nd Floor, Westlands Road, Nairobi | Phone: 020 363 8909 |
| 12. Kestrel Capital (East Africa) Limited | 1st Floor, Orbit Place, Westlands Road, Nairobi | Phone: 020 2251758 |
Overview of Top Derivatives Brokers in Kenya
- AIB-AXYS Africa Limited
- One of the leading financial services firms, AIB-AXYS Africa offers a wide range of investment solutions, including derivatives trading. The company’s office is located in Westlands, Nairobi, making it easily accessible for clients seeking sophisticated trading tools and expert financial advice.
- EGM Securities Limited (Trading as “FX Pesa”)
- EGM Securities, trading under the name “FX Pesa,” is a key player in the forex and derivatives market. The company provides a robust online platform for trading in forex, CFDs, and other derivative instruments. Their office is located in Delta Corner Towers, Westlands, Nairobi.
- Faida Investment Bank Limited
- Faida Investment Bank, located in Nairobi’s Crawford Business Park, is known for offering a comprehensive suite of brokerage services, including access to derivatives markets.
- Genghis Capital Limited
- Genghis Capital, a trusted name in Kenya’s financial markets, provides derivative trading services alongside other wealth management solutions. Their offices are located on Westlands Road, Nairobi.
- SCFM Limited (Trading as “Scope Markets”)
- Scope Markets is a well-established broker offering derivatives trading, particularly in forex, commodities, and indices. Their offices are situated at Westside Towers in Westlands, Nairobi.
- Standard Investment Bank Limited
- Standard Investment Bank (SIB) is one of Kenya’s top investment banks, providing clients with access to a variety of derivative products. Their headquarters are located in the JKUAT Building, Kenyatta Avenue, Nairobi.
- Sterling Capital Limited
- Sterling Capital, based in Delta Corner Annex, Westlands, is a reputable player in the derivatives market, offering clients reliable trading platforms and expert advisory services.
- NCBA Investment Bank Limited
- NCBA Investment Bank, a subsidiary of NCBA Group, provides derivatives trading services to both institutional and individual investors. They are located on Mara Road, Upper Hill, Nairobi.
- Dyer and Blair Investment Bank Limited
- Dyer and Blair, one of the oldest investment banks in Kenya, offers derivative trading services as part of its broader investment banking offerings. Their offices are in Goodman Tower, Off Waiyaki Way, Nairobi.
- SBG Securities Limited
- A subsidiary of Stanbic Bank, SBG Securities offers derivatives trading alongside other stockbroking services. Their office is located at Stanbic Bank Centre, Westlands Road, Nairobi.
- Kestrel Capital (East Africa) Limited
- Kestrel Capital, one of the largest brokerage firms in Kenya, offers a comprehensive range of financial services, including derivatives trading. Their offices are located on Westlands Road, Nairobi.
The Role of the Capital Markets Authority (CMA)
The Capital Markets Authority (CMA) plays a critical role in ensuring that Kenya’s derivatives market operates smoothly and securely. By licensing and regulating derivatives brokers, the CMA guarantees that only trustworthy and competent firms handle investors’ trades. The CMA’s strict regulations also protect investors from potential fraud and ensure the integrity of Kenya’s financial markets.
Contact Details of the Capital Markets Authority (CMA)
For any queries, complaints, or additional information regarding licensed derivatives brokers, investors can contact the CMA:
- Head Office: Embankment Plaza, 3rd Floor, Longonot Road, off Kilimanjaro Avenue, Upperhill, Nairobi
- Phone: +254 722 207767 / +254 20 2264000
- Email: corporate@cma.or.ke
The derivatives market in Kenya offers exciting opportunities for investors looking to diversify their portfolios and hedge against various financial risks. However, it is important to work with licensed brokers who are regulated by the CMA to ensure that your trades are conducted in a secure and transparent environment. The above list provides a detailed overview of the licensed derivatives brokers in Kenya as of 2024, giving investors a reliable resource for choosing the right broker for their trading needs.
As derivatives trading continues to gain traction in Kenya, investors should stay informed about the latest market trends and regulatory updates to maximize their investment potential while minimizing risks.
