The Commodity Futures Trading Commission has said it is studying whether the Chicago Climate Exchange’s Carbon Financial Instrument (CFI) performs a “significant price discovery function”. The US regulator said that if it determines the contracts plays a substantial role in the price formation of carbon credits, the contract could then be subject to regulatory oversight by the CFTC.
The US futures regulator launched its investigation into the price discovery role of the CFI contract August 17 when it released a public comment request.The study focuses specifically on CCX's spot CFI contract traded, which operates as an exempt commercial market. Each CFI represents 100 metric tons of CO2 or the equivalent...