The Commodity Futures Trading Commission (CFTC) has issued non-binding guidance to designated contract markets (DCMs) on listing voluntary carbon credits (VCCs) derivative contracts. Critics argue that this guidance addresses a minor issue, given the low open interest and trading activity of VCC derivatives on CFTC-regulated DCMs. The guidance, along with multiple convenings, task force establishment, and a whistleblower office alert, has garnered significant attention for a class of derivatives that is not central to the CFTC s regulatory concerns. The guidance does not establish new obligations for DCMs and is criticized for not providing clarity or fostering transparency. Critics suggest that the focus on VCC derivatives may be an attempt to promote political ideologies, such as Environmental and Social Governance (ESG) compliance and Net Zero goals, which are not directly related to the regulatory obligations of listed derivatives products. The dissenting opinion argues that the CFTC should evaluate VCC derivative products as it would any other derivative product listed by a DCM, without focusing on ESG and Net Zero considerations. The outsized attention given to VCC derivatives is seen as a promotion of ideology rather than a genuine effort to offer guidance. In summary, the CFTC s non-binding guidance on VCC derivatives is criticized for its lack of clarity, transparency, and relevance to regulatory obligations. Critics argue that the focus on ESG and Net Zero goals may be a backdoor attempt to inject political ideologies into CFTC regulatory decisions, and that the guidance should be evaluated and regulated in the same manner as other derivative products listed by DCMs.
Source: mondovisione.comPublished on 2024-09-20
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