FIA has responded to an International Organization of Securities Commissions (IOSCO) public consultation on recommendations for establishing sound Compliance Carbon Markets (CCMs) and on key considerations for enhancing the resilience and integrity of Voluntary Carbon Markets (VCMs).
FIA’s response highlights that commodity markets, as well as related futures, options and centrally cleared derivatives markets, are playing -- and will continue to play -- a critical role in helping the global economy navigate and manage the risks associated with climate change, and the energy transition.
FIA commends IOSCO for commissioning the underlying reports and fostering dialogue among governmental and private stakeholders across countries and regions on the important, yet complex, issues surrounding the development of carbon markets.
FIA’s response encourages IOSCO to:
- Recognize carbon allowances and offsets as commodities;
- Support a principles-based approach to regulation while also encouraging regulators to keep in mind the bespoke character of carbon markets and assess which regulations are appropriate;
- Support access to compliance markets by a wide range of market participants, including financial participants and intermediaries;
- Encourage the development of standardized derivatives contracts; and
- Closely monitor developments in the carbon market space and, where relevant, ensure there is cross border coordination among jurisdictions.
