The Board of the Capital Markets Authority (CMA) on Monday announced they have approved the grant of a license to SCFM Limited to operate as a Non-Dealing Online Foreign Exchange Broker in line with the Capital Markets (Online Foreign Exchange Trading) Regulations, 2017.The non-dealing online foreign exchange broker license means the entity is licensed by the Authority to act as a link between the online foreign exchange market and a client in return for a commission or mark-up in spreads and does not engage in market-making activities (buying and selling of foreign currencies).
“This is the second non-dealing online foreign exchange broker license to be issued under the new regulations, which brought the oversight of online foreign exchange brokerage services under CMA. The first license was issued to EGM Securities Limited in 2018,” a statement from CMA disclosed.
Non-dealing Online Forex Brokers avail a trading platform to clients to enable them trade from anywhere and at any time using their electronic devices. The platform provides access to global markets and also provides an opportunity to clients to educate themselves on the global financial markets.
Non- dealing Online Forex brokers do not offer client advice or trade on behalf of their clients. Clients deposit their investment amount with an account to be offered by the broker.
The trader (client) is responsible for executing trades – buying and selling of any products on the platform and the requisite risk assessments are undertaken to determine suitability of clients to participate in online forex trading.
Forex trading (FX) is the speculation of one currency price against another currency. It is an example of a Contract for Difference (CFD) which is defined as an agreement to exchange the difference in the value of an asset from the time the contract is opened and when the contract is closed.