The Capital Markets Authority has invited members of the public to comment on its draft Commodity Markets Regulation starting today, 12 August to 12 September 2019.
This draft is in line with the 10-year Capital Market Master Plan 2014-2023, which is focused on the Food Security aspect of the Big four Agenda and part of the Northern Corridor Integration Projects which strives to drive regional development through infrastructure improvement and ease of movement of goods and people.
The regulations provide for the licensing of commodity exchanges, brokers and the approval of clearing houses. At the same time, the draft stipulates trading and conduct of business in the exchange, including the nature of platforms and transactions that will occur in the commodity exchange.
Some of the provisions of the draft seek to protect the market from excessive speculation of commodities through establishing a procedure which fixes limits on amounts of trading under commodity contract.
At the same time, the regulation provides for a commodity settlement guarantee fund that will help members of the commodity exchange who fail to meet their clearing obligations to commodity exchange.
The regulation provides a competitive market for both agricultural and non-agricultural commodities, improves efficiencies on the value chain, which will further the government’s effort to enhance food security.
The Authority welcomes public commentary to promote an inclusive and appropriate regulation for all commodities since the law affects multiple stakeholders.
Read the full Commodity Market draft here.