Technical changes pave way for emissions trading

  • Lianne Dalziel

Cabinet has agreed to technical changes to the regulatory framework for securities and futures exchanges and clearing and settlement systems that will support the introduction of emissions trading markets.

Commerce Minister Lianne Dalziel says the proposals, to be contained in a Designated Settlement Systems Bill expected to be introduced early in 2008, will benefit the financial markets by bringing the regulatory regime into line with international best practice.

“The decisions are particularly timely given the initiative New Zealand is taking in developing its carbon markets. Meeting international best practice will make New Zealand more attractive to international participants."

The proposed reforms involve:

  • amendments to the Securities Act to confirm that an emissions unit will not be defined as a "security";
  • registered exchanges will be recognised as authorised futures exchanges under the Securities Market Act; and
  • amendments so the New Zealand regime for clearing and settlement systems better conforms with International Organisations of Securities Commissions (IOSCO) recommendations. The amendments include granting designated clearing houses a level of certainty that enables them to defeat any other securities interests in collateral posted on that exchange.

Officials will be consulting on the draft Bill before it is introduced into Parliament, Lianne Dalziel said.