Regulatory Alerts2023-03-22
The Foreign Exchange Code
The Central Bank of Kenya (CBK) has released the Kenya Foreign Exchange Code (FX Code) to strengthen and promote the integrity and effective functioning of the country's wholesale foreign exchange market. The FX Code sets out standards for market participants, including banks licensed by the CBK, to ensure ethical and professional behavior, sound governance, robust risk management, and transparent communication. It aims to facilitate a well-functioning market that supports Kenya's flexible exchange rate regime. The FX Code, based on the FX Global Code and best practices, requires market participants to avoid illegal financial transfers and implement anti-money laundering policies. It emphasizes the importance of confidentiality and consent in information sharing and outlines key risk types, such as credit/counterparty, market, operational, and settlement risks. The CBK expects full compliance with the FX Code by December 31, 2023, with quarterly reports on adherence starting July 14, 2023.