Why Kenyans Should Run an Online Forex Trading Account as Opposed to Running a Foreign Exchange Bureau in a City Building ~ forex trading news update
The licensing requirement
Regulation 2(1) of the Central Bank of Kenya (Foreign Exchange Business) Regulations, 2007 states that an application for the grant or renewal of a license to transact foreign exchange business shall be in Form CBK/FXD/1 in the Schedule and shall be accompanied by the prescribed fee.
Operating an online forex account requires no license. As long as you are over 18 years of age you are free to open an online forex trading account with your preferred online forex broker. Licenses can be a headache considering the fact that there are channels involved in obtaining them. Mostly, you have to know someone somewhere to expedite your application for a license. That can be stressful. The online forex market reduces that stress by curtailing the licensing requirement. Unless you are operating as an online forex broker, there is no need for a trading license and you can trade the online forex market so long as you have the forex trading capital.You do not need huge capital to start trading. Open a trading account with NORDfx and trade both forex and binary options for only 10 dollars.
Payment of a non-refundable fee
Regulation 2(3) of the Central Bank of Kenya (Foreign Exchange Business) Regulations, 2007 states that an applicant for a foreign exchange bureau license shall in addition to other licensing requirements pay a non-refundable application fee of ten thousand shillings.
That non-refundable fee can actually be a stating capital for a newbie operating a micro trading account. There are online forex brokers who even allow trading with as low as 25 dollars. That implies that an individual with Kshs. 10,000 which is a non-refundable fee for application for a license under the Central bank Regulations can actually have a chance to trade more in the online forex market.
Supply of too much information
Regulation 2(5) of the Central Bank of Kenya (Foreign Exchange Business) Regulations, 2007 stipulates that the Bank may require the applicant to supply such additional information in support of the application as it may consider necessary.
We are all afraid of giving information that could later be used against us. We want to release as little bio data as possible as a safeguard measure against snoops and we get discouraged by anybody who seems to be on a self assessment expedition of who we are and the source of our wealth. Trading forex online involves revealing only the needful to your online forex broker and that means that a lot of information that you’d want to see remaining secret remains so.
License valid only for one year
Regulation 2(6) of the Central Bank of Kenya (Foreign Exchange Business) Regulations, 2007 stipulates that a license under this regulation shall be in Form CBK/FXD/2 in the Schedule and shall be valid for a period of one year from the date of issue.
Imagine the need to renew a license annually without the guarantee that the application will be approved. The online forex account needs no renewal. Unless you’ve received a margin call, you can keep trading and withdrawing your forex profits as long as they keep coming your way.
Minimum core capital
Regulation 3(1) of the Central Bank of Kenya (Foreign Exchange Business) Regulations, 2007 states that a company applying for a foreign exchange bureau license shall not be issued with a license unless it has a minimum core capital of thirty thousand United States Dollars or its equivalent in Kenya Shillings.
In addition, regulation 3(2) provides that the minimum core capital prescribed under paragraph (1) shall be maintained from the date of commencement of operations and at all times during the course of any business operations of a licensed foreign exchange bureau.
Kshs. 2.5 million is a lot of money and few individuals hold such amount in wholesome in their entire lives. You need just a fraction of that amount to invest in the forex market online. You will in fact have the ability to diversify by putting the remainder in a different investment basket.
Grant of a license demands a six months patience
Regulation 4(1) of the Central Bank of Kenya (Foreign Exchange Business) Regulations, 2007 stipulates that within six months of receipt of an application, and subject to fulfillment of any other licensing criteria, the Central Bank of Kenya shall grant a foreign exchange license to an applicant upon-
(a) payment by the applicant of a license fee of sixty five thousand shillings or such other amount as may be determined by the Central Bank of Kenya from time to time; and
(b) remittance by the applicant of a non-interest bearing deposit of thirty thousand United States Dollars to a Central Bank of Kenya Dollar Account to be advised.
Six months are enough for any newbie to demo trade and learn all the essential aspects of trading the online forex market. The average demand of operating a forex bureau is a thousand times more than the demands of running an online forex trading account.
The annual license fee
Regulation 4(2) of the Central Bank of Kenya (Foreign Exchange Business) Regulations, 2007 states that the annual licence fee referred to in sub regulation (1) shall be payable on or before the 31st December of the calendar year preceding the validity of the license.
With the online forex market you do not have to worry about your annual subscription fee or something close to that. Operating a live forex trading account demands only your capital and your forex broker will certainly not demand that you maintain an exorbitant trading capital before you can execute a trade in the online forex market.
Other rules that are peculiar to a forex bureau are listed below.
The retrospective nature of the Central Bank of Kenya (Foreign Exchange Business) Regulations, 2007
Regulation 4(3) provides that every foreign exchange bureau licensed prior to the commencement of these Regulations and which paid a non-interest bearing deposit of five thousand United States Dollars shall be required to increase the deposit paid to ten thousand United States Dollars within one year of the commencement of these Regulations.
Suspension or revocation of license
Regulation 6(1) of the of the Central Bank of Kenya (Foreign Exchange Business) Regulations, 2007 provides that a foreign exchange bureau shall-
(a) submit, not later than three months after the end of its financial year, to the Central Bank of Kenya, its annual audited accounts and a copy of the auditor’s report in the prescribed form;
(b) furnish, at such time and manner as the Central Bank of Kenya may direct and require, any information in an accurate and complete manner to discharge its functions under the Act; and
(c) comply with such guidelines as may be issued by Central Bank of Kenya through circulars.
Regulation 6(2) states that the Central Bank may suspend or revoke the licence of a foreign exchange bureau which contravenes sub regulation (1).
The Non-Refudable Fees
Regulation 7(1) of the of the Central Bank of Kenya (Foreign Exchange Business) Regulations, 2007 states that any fees prescribed under these Regulations shall be payable to the Central Bank of Kenya.
Regulation 7(2) adds further that any fees paid to the Bank under these Regulations shall be non-refundable.
In conclusion, you can now decide between operating an online forex trading account and running a forex bureau. The choice depends on your capital worth and business skills. One thing is however sure; operating an online forex trading account is a lot less demanding than running a forex bureau in the middle of the city.
Begin a life of financial independence today by opening a trading account with a regulated and trusted broker.You do not need huge capital to start trading. Open a trading account with NORDfx and trade both forex and binary options for only 10 dollars.
Call us today on 0725 050 419 for the best forex trading orientation.
Begin a life of financial independence today by opening a trading account with a regulated and trusted broker.You do not need huge capital to start trading. Open a trading account with NORDfx and trade both forex and binary options for only 10 dollars.
Call us today on 0725 050 419 for the best forex trading orientation.
More online forex articles below:-
Every trade is a loss waiting to happen
Do not ignore the economic calender
Reasons why you should be trading with more than one forex broker
Every trade is a loss waiting to happen
Do not ignore the economic calender
Reasons why you should be trading with more than one forex broker