Eligibility for international emission units under Australia cap-and-trade – hedging exercise for large emitters' risk management structures
- Category: Australia cap-and-trade
How to effectively hedge in the Australian carbon market for 2015? Considering the first domestic permit auction is planned for late 2014, assessing the possibilities and profitability for contracting international units seems to be crucial.
Draft Regulation on central securities depositories – relation with the emission market
- Category: Emissions trading
The new framework for central securities depositories (CSD) provides for the rule that without prejudice to the corporate law under which the securities are constituted, an issuer will have the right to arrange for its securities to be recorded in any CSD established in any Member State. A CSD conducting business in different jurisdictions is obliged, however, to identify and mitigate the risks arising from any potential conflicts of laws across jurisdictions.
EC vs. ITRE – status for the physically settled forward products in MiFID II at stake
- Category: Emissions trading
The opinion of the ITRE Committee highlights the fact that physically settled forward products in MiFID II EC proposal are classified as financial instruments. The essence of the recent ITRE proposal is, however, to explicitly exclude products that can be physically settled and that are entered into for commercial purposes and do not display the characteristics of other derivative financial instruments.
Legal complications with cross-border collateral EUAs arrangements after recent Registry Regulation amendment
- Category: Emissions trading
It appears that the regulatory work has stopped half way. Since the critical determination whether a trade has been performed in good faith would still be done in accordance with national laws it could be presumed that problems with enforcement of property rights will persist.
Extending Financial Collateral Directive to spot emissions allowances trade – why not?
- Category: Emissions trading
It could presumably contribute to strengthening the liquidity in the emission allowances market and prop-up ailing prices if the safeguards provided for in the Financial Collateral Directive were extended to carbon instruments.
Also emitters could gain advantage from such a legislative action.
Registration for REMIT – requirement to reveal corporate structures
- Category: Energy market
As market participants will not be allowed to trade until they are registered, it may potentially represent a barrier to trade in the internal energy market.
Registration will not be a one-off event, but rather an ongoing requirement due to obligation to keep information provided up-to-date. From the practical point of view it is therefore necessary to establish within corporate structures of market participants arrangements ensuring that new requirements will be properly and timely discharged.
It should be noted that market participants are under obligation to register even if they are located outside the European Union.
Another issue of potential significance for the wider market is the commercial exploitation for data contained in the part of the register publicly revealed by ACER.
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