This archive report was first published on 7 July 2020.
July 7, 2020 - The Capital Markets Authority (CMA) is yet to implement the Direct Settlement System (DSS) to regulate coffee trading, despite the regulations being gazetted in April 2020.
The DSS was intended to guarantee speedy and transparent payment of proceeds from sales to farmers, but its implementation has been delayed.
Acting Chief Executive Wycliffe Shamiah directed the existing payment mechanisms to be utilized in the interim period as the DSS is being put in place.
“Details of direct coffee sales will be reported to the Nairobi Coffee Exchange; all disputes that may arise in relation to coffee sales should be forwarded to the Authority to ensure follow up and resolution for the benefit of the coffee growers; and an industry committee be constituted to address any gaps that exist and those that may emerge during the transition period,” said Shamiah.
The Capital Markets (Coffee Exchange) Regulations 2020 give CMA the mandate to regulate all coffee functions, including the incorporation of the coffee exchange, licensing of brokers, and establishment of a direct settlement system.
The regulations also give CMA the mandate of conducting trading in a secure, stable, and transparent manner in an environment of fair competition, and protection of the interests of the grower, the buyer, and other stakeholders at an exchange.
