Membership Categories

Key Membership Terms and Definitions: Source: Section 2 “Interpretation” of KOMEX Rulebook 2023

“Affiliate Member” means a person admitted as a member of KOMEX conferring a right to trade in goods or services on KOMEX on their own behalf or to offer support to members of the KOMEX Eco-system;

“Authorized Representative” means a person authorized through a power of attorney (in the case of individual members) or by letter of appointment (in the case of Body Corporates) by a member to represent and act on behalf of that member;

“Body Corporate” means any entity which is registered or incorporated under any law and has a legal personality distinct from its members or shareholders, and includes partnership, trust, cooperative society, savings and credit cooperative society, community based organization or any other association of persons recognized as a corporate body under any law in Kenya;

“Certified Warehouse” means a warehouse approved and designated by the KOMEX for making deliveries to and taking deliveries from in fulfilling contractual obligations resulting from transactions in commodities;

“Clearing House” means Clearing House of KOMEX, or an entity designated, providing the services of settlement of transactions to the KOMEX members, and guaranteeing settlement by delivery or otherwise of the obligations to the clearing members, on behalf of the KOMEX;

“Clearing Member” means a member of the KOMEX who has the right to clear transactions in commodities that are executed in the trading system of the KOMEX;

“Client” means a registered member of KOMEX on whose account a commodity broker carries on trading in any spot commodity contract, but does not include directors, key personnel, representatives and related companies of the commodity broker;

“Commodity Dealer” means a Member that is engaged in the buying, selling, trading, or brokering of commodities, either for their own account or on behalf of others;

“Member” means any person admitted to membership of KOMEX and includes the trading member, commodity broker, clearing and settlement member, and affiliate member;

“Trading Member” means a person who is admitted by KOMEX as a member conferring a right to trade on the KOMEX Trading System and who may be allowed to make deals for themselves for settlement through the Clearing House of KOMEX;

“Trading-cum-Member” means a person who is admitted by KOMEX as a member of the KOMEX conferring a right to trade through the Clearing House of KOMEX and who may be allowed to make deals for themselves as well as on behalf of the clients and settle such deals only; and

“Warehouse Operator” means the warehouse service provider registered with the KOMEX and licensed by the relevant authorities.

Membership Categories: Source: Section 9(2) “Classes of Membership” of KOMEX Rulebook 2023

The following KOMEX Membership Categories have been approved by the Capital Markets Authority:

# Category Sub-Category Eligible Activities Application Fees (KES.) Membership Fees (KES.)
1 Trading Member (Body Corporate/ Individual) 1.1 Organizations Can execute trades on own account or supported by Commodity Brokers
 1.2 Individuals Can only trade through Commodity Brokers
2
 
Commodity Brokers (Body Corporate)

Trading-cum-Clearing Brokerage Firms Executing trades as agents of Corporate or Individual Trading Members or on their own account
3 Clearing and Settlement Member (Body Corporate) 3.1 Warehouse Operators Warehousing Logistics Services and Collateral Management Services
 3.2 Settlement Banks Banking & Financial Services
4 Affiliate Member (Body Corporate) 4.1 Private Sector Organizations Input Supplies; Quality Inspection and Testing Services; Freight Transport and Logistics Services; Insurance Services; Payment Services and Fintechs; Business Member Organizations; Business Development Services; and, Trade Support Services
 4.2 Public Sector Organizations Sector Regulators, Ministries, Departments and Agencies (MDAs)
 4.3 Development Partners Non-Governmental Organizations; Social Enterprises; and, Community-Based Organizations, supporting farmers/producers,  traders, and KOMEX

Notes:

      • Application fees (one-off) paid in advance
      • Membership fees (annual) paid in advance
      • Fees are non-refundable

KOMEX Value Proposition to Members

  1. Access to a regulated digital marketplace for structured trading of primary and processed agricultural and non-agricultural commodities with verified, vetted, and regulated market participants;
  2. An alternative competitive marketplace for domestic, import, and export trading of commodities with transparent framework offtake and supply contracts;
  3. Enhanced safety and quality assurance of food commodities for retail consumers, institutions, processors, and manufacturers through enforced SPS measures, quality standards grading, inspection, and testing;
  4. Improved earnings for producers, processors, and traders through market-driven price discovery, timely settlement of trades (pre-funded);
  5. Market failure derisking through contributory Settlement Guarantee Fund (SGF);
  6. Access to negotiated Trade Support Services, Banking, Finance, Insurance, and transport logistics;
  7. Access to Warehouse Receipt System (WRS) regulated quality storage and collateral management;
  8. Access to Special Trading Windows (boards) for special procurement requirements;
  9. Access to market information and trade data for informed decision-making; and,
  10. Investment opportunities for private sector in commodities markets through input supplies, commercial production, processing, warehousing, quality inspection and testing, trading, trade finance, trade support, and logistics.

Introduction

Agriculture and related activities are the main source of income and 60 percent of employment for over 80 percent of Kenyans. The sector accounts for more than half of the country’s gross domestic product (GDP). The Government of Kenya (GoK) depends for about 45% of its revenue from this sector. Agriculture also makes up more than 50% of the country’s export earnings. Accordingly, the GoK has placed a great deal of importance and due attention to the development of agriculture in Kenya.

To address the growth and development challenges of the sector, the GoK has expressed a strong policy commitment to supporting the establishment of a public-private sector-led National Commodities Exchange (“the Exchange”). The Exchange will materially impact on the livelihoods of millions of Kenya’s smallholder producers and other actors, in both agricultural and non-agricultural commodity value chains, and the agricultural development led industrialization.

A transparent and efficient marketing system for key commodities in the country helped by the Exchange will have significant economic impact not only in terms of improving the export competitiveness of Kenyan commodities but also in stimulating domestic value addition and processing and other post-harvest activities. A marketing system that enables all actors to participate in a “level playing field” will further enable Kenya to achieve its goals of financial inclusion and support to less advantaged actors in the economy, particularly small-scale farmers and traders, largely operating in the informal economy.

A vibrant Exchange, powered by appropriate information and communications technology (ICT), will also strengthen the vision to place Kenya as an African, and potentially global, powerhouse in ICT. The Exchange shall be regulated by the Capital Markets Authority. A further ambition would be to ensure that a commodity exchange, while initially and primarily serving the needs of the Kenyan economy, evolves to potentially become a regional and continent-wide hub for the structured trading of commodities. The establishment of the Exchange in Kenya should finally be a private sector-led undertaking, with the concrete support and enabling environment provided by the public sector in various ways, such as policy and regulatory support, legal framework, and other measures.

The State Department of Trade, to lead the project for establishment of the Commodity Exchange in Kenya, has hired the Consultants to implement the framework of commodity exchange. A Task Force comprising representatives of relevant line ministries has been set up. It is thus envisaged that the Consultants will work on implementation of the Commodity Exchange in regular close interaction with the Taskforce.

Kenya Vision 2030is the country’s new development blueprint. It aims to transform Kenya into a new industrializing, “middle-income country providing a high quality life to all its citizens by the year 2030”. The adoption of the Vision by Kenya comes after the successful implementation of the Economic Recovery Strategy for Wealth and Employment Creation (ERS) which has seen the country’s economy back to rapid growth since 2002, when GDP grew from a low of 0.6% and rising gradually to 6.1% in 2006. The Vision 2030 is based on three “pillars”: the economic, the social and the political.