CMA unveils plan to restructure Nairobi Coffee Exchange
Farmers will start receiving their payment directly in the next three months as the government deepens new regulations aimed at reorganising the Nairobi Coffee Exchange (NCE).
Starting May 1, 2023, farmers will start receiving their sale proceeds under the Direct Settlement System (DSS) unlike currently where the earnings have to be handled by numerous players before farmers access it. In the new reorganisation, NCE management will be required to constitute a board and establish a new payment system, to allow farmers access their proceeds directly.
Last week the Capital Markets Authority (CMA) issued a plan to restructure the NCE. The stock market regulator extended the in-principle approval granted to the NCE to continue operating as a coffee exchange to April 30, 2023. The approval had been extended to December 31, 2022.
The approval was granted in accordance with the Capital Markets (Coffee Exchange) Regulations, 2020, with the understanding that NCE will work towards full compliance with the Coffee Exchange Regulations. This is expected to give impetus to the ongoing coffee sub-sector reforms.
“The requirements include onboarding a DSS provider to expedite and enhance transparency in settlement of coffee sale proceeds, submission of trading rules aligned to the Coffee Exchange Regulations to guide the trading operations at the NCE. And strengthening the governance structure by reconstituting the NCE board to comply with the Capital Markets (Corporate Governance) (Market Intermediaries) Regulations, 2011,” said CMA Chief Executive Officer Wyckliffe.