CFTC Issues Official Guidance on Carbon Credit Derivatives
"The Commission recognizes that VCC derivatives are a comparatively new and evolving class of products, and believes that guidance that outlines factors for consideration by a DCM, in connection with the contract design and listing process, may help to advance the standardization of such products in a manner that promotes transparency and liquidity."
CFTC Final Guidance
"The Commission recognizes that VCC derivatives are a comparatively new and evolving class of products, and believes that guidance that outlines factors for consideration by a DCM, in connection with the contract design and listing process, may help to advance the standardization of such products in a manner that promotes transparency and liquidity."
CFTC Final Guidance
The CFTC issued guidance on the listing of voluntary carbon credit ("VCC") derivative contracts. The guidance was published in the Federal Register.
As previously covered, the CFTC outlined factors that designated contract markets ("DCMs") should consider when addressing the CEA's Core Principle requirements and CFTC regulations on the listing for trading of VCC derivative contracts. These factors concern terms and conditions on underlying commodity credit quality, contract design, listing, and market surveillance to prevent manipulation.