The U.S. Commodity Futures Trading Commission (CFTC) has reportedly decided to regulate aspects of the CCX’s emissions trading program. This announcement follows the CFTC’s decision earlier this month to assess whether CFIs, the tradable emissions reduction unit listed on the CCX, perform a significant price discovery function. If, as the CFTC has suggested, it will issue an order determining that CFIs perform such a function, the previously exempt CCX must come into compliance with certain core requirements of the U.S. Commodity Exchange Act. These requirements would subject CFIs and CCX market participants to the CFTC’s position limits and large trader reporting requirements, among other things. The CFTC’s announcement coincides with the U.S. Senate’s consideration, in the context of the Waxman-Markey Bill, of the way any future emissions trading under that bill would be regulated and which agency would oversee and enforce the trading rules.
For further information, please see the CFTC’s media release.