King & Wood Mallesons (Richard Mazzochi, Partner and Claire Potter, Registered Foreign Lawyer (England and Wales)) is delighted to have worked with the Global Financial Markets Association (GFMA) and other leading industry bodies in preparing the GFMA response to the public consultation published by the International Organization of Securities Commissions (IOSCO)[1] on recommendations for establishing sound Compliance Carbon Markets and on key considerations for enhancing the resilience and integrity of Voluntary Carbon Markets.
The IOSCO consultation was launched at COP 27 in Sharm el-Sheikh on 9 November 2022 and called on market participants to provide feedback on how to foster fair and functional carbon markets and increase structural resilience to ensure that carbon markets achieve their environmental objectives.
When launching the consultation, the IOSCO Chairman, Jean Paul Servais, commented that: “In recent years, carbon markets have gained significant importance as a mechanism for corporates, and society in general, to facilitate their transition towards net zero. However, they have so far fallen short of their objectives. No market can function without appropriate levels of integrity and, transparency, and liquidity so IOSCO today hopes to lend its international, market expertise to help develop appropriate frameworks for sound and well-functioning carbon markets, focusing on promoting integrity and liquidity and increasing transparency to facilitate price discovery.”
The GFMA represents the common interests of the world’s leading financial and capital market participants to provide a collective voice on matters that support global capital markets. The Association for Financial Markets in Europe (AFME) located in London, Brussels, and Frankfurt; the Asia Securities Industry & Financial Markets Association (ASIFMA) in Hong Kong; and the Securities Industry and Financial Markets Association (SIFMA) in New York and Washington are, respectively, the European, Asian, and North American members of the GFMA.
The GFMA response to the IOSCO report on Compliance Carbon Markets and the IOSCO report on Voluntary Carbon Markets was submitted on 10 February 2023. A copy of the GFMA response to each report can be found here.
The key themes in the GFMA response include those listed below. Critically, both Compliance Carbon Markets and Voluntary Carbon Markets must be underpinned by the same core principles that underpin any sound and robust regulated market: (i) transparency; (ii) integrity; (iii) stability; and (iv) accountability.
|
Compliance Carbon Markets
|
Voluntary Carbon Markets
|
Example
uses 2
|
|
|
|
King & Wood Mallesons is delighted to have held the pen for GFMA in drafting their response to the two IOSCO reports, and thanks GFMA members from across Europe, the United States and Asia for their invaluable input.
King & Wood Mallesons is working with ASIFMA on a study considering Asia’s growing carbon markets and how they can support and upscale global decarbonisation. The ASIFMA paper will build on the significant work already undertaken in connection with the development of safe and effective carbon markets by providing Asia focused guidance on the key issues.
Any reference to “Hong Kong” or “Hong Kong SAR” in this article shall be construed as a reference to “Hong Kong Special Administrative Region of the People’s Republic of China”.
Reference
[1] IOSCO is the leading international policy forum for securities regulators and is recognized as the global standard setter for securities regulation. The organisation's membership regulates more than 95% of the world's securities markets in some 130 jurisdictions.
