Futures Development Corporation

Transparent and secure investments

Primary rules

Accepting money from the public without a licence from the Central Bank of Kenya is a violation of section 3 of the Banking Act and amounts to a criminal offence. Service Providers should not accept money from the public as they would be breaking the law.

The public is advised not to transact with Service Providers whose solicitation involves the depositing of money with them.

Commodity and foreign currency trading brokers provider legal facilities for the opening of individual accounts to which the client has exclusive access. The Service Provider cannot and should not be able to access your funds. All the Service Provider can do is place trades on your behalf if you authorize him to do so using a limited power of attorney that the broker provides you with.

Apart from breaking the law, depositing your money with a local Service Provider provides an opportunity for fraud. Because you are unable to directly monitor the performance of your account, the Service Provider can deceive you as to its actual performance.

FDC MEMBERS DO NOT ACCEPT DEPOSITS FROM THE PUBLIC

Service providers should sufficiently disclose the risk of leveraged trading to the client. Clients should only invest money which, if they lost it all, would not materially change their lifestyle.

A standard risk disclosure for leveraged forex trading is as follows:

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

 

Where a service provider guarantees return, he should provide the client with an online link to the original trading statement for the last six months. The public is advised not to rely on word or excel trading statements or trading statements that can be manipulated. All brokers in the world provide non-editable account statements detailing the performance of any trader. Insist on being given a link to the broker-generated trading statement.

Where no guarantees of return are provided, the Service Providers need not furnish their trading statement.

RISK DISCLOSURE

NO GUARANTEEING OF RETURNS WITHOUT PROVIDING ORIGINAL STATEMENT

Service Providers should ensure that clients have direct access to their account statements. Clients should be able to log onto their account statements from anywhere in the world without the presence of the Service Provider.

 

PROVIDING CLIENTS DIRECT ACCESS TO THEIR ACCOUNT STATEMENTS