CFTC Withdraws Voluntary Carbon Market Guidance
Public Policy & Regulation attorneys Alexander Holtan and Halley Townsend were quoted in an article by Argus on the U.S. Commodity Futures Trading Commission's (CFTC) decision to withdraw its 2024 guidance on voluntary carbon credits (VCCs) linked to derivatives. The attorneys commented on how the development could affect future enforcement actions and whether it would affect the day-to-day running of exchanges.
Mr. Holtan explained that even though the guidance was not binding, it provided the CFTC "slightly stronger grounds to pursue [through] enforcement action or some sort of regulatory undertaking with respect to an exchange if there was an issue with one of the contracts that they listed."
Ms. Townsend added that the move should not significantly alter how exchanges operate because "[s]uch contracts are still going to be evaluated under common core principles that apply to those CFTC-regulated exchanges [and] designated contract markets."