US: Transaction reporting rules in California - a guide

21 February 2014 18:24 Source:ICIS

As part of a package of potential amendments to the regulation of the California cap-and-trade programme, regulator the Air Resources Board (ARB) proposed in 2013 to introduce more detailed transaction reporting rules.

The regulator wants to shift from the current system – where companies are required to report the price at which they buy and sell California carbon allowances (CCAs) and offsets – to a reporting system based on three different transaction types.

The draft stipulates that, when submitting a transfer request, counterparties must enter into the compliance instrument tracking system service (CITSS) – the registry where allowances and offsets are held – information about the deal. These include the date of the agreement and the type, quantity, price and vintage of the CCAs/offsets involved.

Parties would then be required to specify if the transaction was closed on exchange; over-the-counter (OTC) for a product with delivery within the three following days; OTC for a product with later delivery, or involving multiple transfers, or the bundled sale with other products.

In the latter case, the fixed price of the transaction, or the price as a cost base plus a margin, would have to be disclosed. If these are missing, counterparties would need to provide a brief description of the pricing method. Silvia Molteni

By Silvia Molteni