Capital Markets (Coffee Exchange) Regulations 2020

Capital Markets (Coffee Exchange) Regulations, 2020

PART I - PRELIMINARY

1. These Regulations may be cited as the Capital Markets (Coffee Exchange) Regulations, 2020.

2. In these Regulations, unless the context otherwise requires—

“Act” means the Capital Markets Act;

“auction” means the auction system under which clean coffee is offered for sale at a coffee exchange and includes the place at which, or a facility by means of which, whether electronic or otherwise, offers or invitations to sell, buy or exchange coffee contracts are regularly made on a centralized basis, but does not include—

(a) the office or facilities of a coffee buyer or service provider; or (b) or the office or facilities of a clearing house;

“auction levy” means such fee per sixty-kilogram bag of coffee or other less volume of coffee sold at a coffee exchange, payable by millers, roasters and buyers;

“Authority” means the Capital Markets Authority established under section 5 of the Act;

“bid” means an offer to pay a particular amount of money for a given lot of clean coffee being offered for sale at a coffee exchange;

“broker” means a person cleared by the exchange and licensed by the Authority, who may be appointed by a coffee grower or an association of coffee growers in accordance with the Crops (Coffee) (General) Regulations, 2019 to sell their coffee on their behalf through the Exchange.;

“coffee buyer’’ means an incorporated company licensed under the Crops (Coffee) (General) Regulations, 2019 to buy clean coffee at the exchange for export, local sale or value addition or to import clean coffee for secondary processing in Kenya;

“clean coffee” means coffee bean or dried seed of the coffee plant separated from non-food tissues of the coffee fruit where the silver skin is reduced to the maximum possible extent;

“clearing house” means an entity approved by the Authority, and recognized as a clearing institution on behalf of a coffee exchange, providing the services of clearing and settlement of transactions and guaranteeing settlement on behalf of the exchange;

3. The purpose of these Regulations is to—

(a) to give effect to section 12(1) of the Capital Markets Act;

(b) provide for the establishment and regulation of coffee exchanges;

(c) provide for the licensing of coffee brokers;

(d) provide for the establishment and operationalization of direct settlement system for expedited and transparent payment of coffee sales proceeds;

(e) provide for the promotion and maintenance of an efficient coffee exchange;

(f) give directives, principles and conditions for trading of clean coffee at an exchange;

(g) ensure the trading is conducted in a secure, stable and transparent manner in an environment of fair competition; and

(h) provide for the protection of the interests of the grower, the buyer and other stakeholders at an exchange.

PART II - COFFEE EXCHANGE

4. (1) A person shall not carry on the business of a coffee exchange unless he has applied for approval and licensed as a coffee exchange by the Authority in such manner as the Authority may provide.

[Content continues regarding Coffee Brokers, Coffee Sampling, Trading at the Auction Floor, Settlement of Sales Proceeds, and General Provisions consistent with the provided PDF.]