United States, Environment, California Adopts Cap and Trade Program for Greenhouse Gas Emissions - Jones Day - 10/01/2011, Clean Air/Emissions, Environmental Law, Energy & Natural Resources, Energy Law

United States, Environment, California Adopts Cap and Trade Program for Greenhouse Gas Emissions - Jones Day - 10/01/2011, Clean Air/Emissions, Environmental Law, Energy & Natural Resources, Energy Law: "TRADING AND BANKING OF COMPLIANCE INSTRUMENTS

Market participants may sell or purchase compliance instruments consisting of allowances, offset credits, and sector-based offset credits in the secondary market. Compliance instruments do not expire, which enables covered entities to 'bank' and hold compliance instruments until they are needed and other market participants to hold and sell compliance instruments without any deadlines for sale. Information for each trade, including trade date, settlement date, and price, is required to be reported to the accounts administrator of the program. The program also will prohibit any trading activity of compliance instruments that involves an undisclosed counterparty, manipulative or deceptive devices, fraud, reporting of false or misleading information, misrepresentations, or other efforts to falsify or conceal material facts from the market.

The Dodd-Frank Wall Street Reform and Consumer Protection Act establishes an interagency working group, headed by the Commodity Futures Trading Commission, to conduct a study on the oversight of existing and prospective carbon markets, including oversight of the spot markets and derivative markets. The interagency group is required to submit to Congress a report, no later than January 17, 2011, on the results of the study, including recommendations regarding such oversight. Potential market participants in the California cap and trade program should keep track of these developments.

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