- Partnering with a well-established broker, adhering to rigorous trading regulations, is key for those who wish to avoid unpleasant (and potentially costly) circumstances.
- Regulatory frameworks such as those currently espoused by the Kenya Capital Markets Authority (CMA) are intended to provide a framework that regulated brokers are obliged to follow.
Kenya is quickly becoming a powerhouse within the African investment community, a development closely monitored by the Capital Markets Authority (CMA).
Thanks to the opportunities to become involved within this emerging marketplace, a growing number of individuals are keen to take advantage of potentially lucrative trading positions alongside a regulated broker, ensuring safety and reliability.
Still, it is always better to err on the side of caution. Online trading can represent a dangerous game if the proper regulatory measures are not in place. This is why partnering with a well-established broker, adhering to rigorous trading regulations, is key for those who wish to avoid unpleasant (and potentially costly) circumstances.
Why are Trading Regulations so Important?
The financial industry has employed regulatory controls since the concept of trading first emerged. In the past, the processes themselves were relatively straightforward due to the fact that investors relied upon qualified brokerage firms. However, times have changed thanks to the digital age, making the enforcement of trading regulations more crucial than ever.
It is now possible for individuals and businesses alike to access the financial industry with the click of a button, making online trading more accessible than ever. Therefore, more stringent regulations are warranted thanks to the Capital Markets Authority (CMA). What threats can be addressed with this level of oversight?
The Notion of Accountability
Major indices such as the FTSE and the Dow Jones Industrial Average have developed well-understood regulations over the years. However, we need to remember that emerging markets need to take these concerns even more seriously. This is largely due to increased accountability in the financial industry.
Regulatory frameworks such as those currently espoused by the Kenya Capital Markets Authority (CMA) are intended to provide a framework that regulated brokers are obliged to follow.
Not only will this offer a sense of transparency that clients require, but these very same stipulations protect licensed brokers from fraud and costly legal battles in the event of disputes, reinforcing the value of robust trading regulations.
The "Wild West" Mentality
Any investor who has ever become involved with asset classes such as over-the-counter (OTC) shares is well aware of the risks associated with promises left unfulfilled.
This very same cavalier mindset can cost traders an inordinate amount of money if terms and conditions are not clarified from the beginning. This is once again when top-down regulation comes into play, especially in the realm of online trading.
The CMA (and similar regulatory bodies throughout Sub-Saharan Africa) have been created to rein in organizations and trading firms that fail to adhere to well-established guidelines.
More recently, licensing has been favored for established, legacy brokers, such as Exness who recently celebrated their 15 year anniversary, demonstrating a long-term commitment to security for Kenyan traders.
Established in 2008, Exness offers all of the benefits of a reliable and regulated broker while still providing Kenyans with plenty of offshore investment opportunities.
This is largely due to the fact that Exness is governed by the regulations put forth by both the Cyprus Securities and Exchange Commission (CySEC) and the United Kingdom Financial Conduct Authority (FCA).
Both of these governing bodies are extremely discriminating in terms of which companies they approve for trading. Therefore, Exness is built upon extremely strong foundations.
Without this type of oversight, it would be nearly impossible for investors to tell the difference between a quality organization and a company focused upon marketing "smoke and mirrors" to its clients, highlighting the critical role of engaging with a regulated broker.
The Undeniable Advantages of Modern Trading Regulations
When we remember that the Kenyan marketplace is extremely attractive to foreign investors at the moment, the need for objective and unbiased oversight by the Capital Markets Authority (CMA) becomes even more relevant.
Developing Long-Term Relationships
Many articles which discuss the importance of financial regulations fail to mention another entirely relative point. Investors are no longer willing to work with firms that choose to operate in so-called "grey areas" in terms of regulatory guidelines. They will simply look elsewhere for a brokerage that offers similar products and services.
Regulated brokers are much more likely to enjoy customer loyalty over time. In the event that a problem or dispute happens to arise, it can be dealt with in a timely fashion that is satisfactory for all parties involved.
This is certainly not the case regarding brokers who continue (and sometimes willingly) choose to flout well-established guidelines.
Trust, Clarity and Transparency
The Kenyan financial markets are expected to experience an impressive amount of growth in the coming years. This is why obtaining a license from the CMA is now more important than ever before.
While this type of certification does not guarantee a perennially profitable trading account by any means, it certainly offers a level of protection in the online trading market that would hardly be feasible otherwise.
Are you considering a venture into the Kenyan financial industry? If so, always remember that working with an accredited brokerage is the best way to safeguard your interests and to ensure that nothing is left to chance.