On March 8, the Financial Conduct Authority (FCA) published a consultation paper detailing its proposals to regulate bidding for emissions allowances on the UK auction platform under the UK Emissions Trading Scheme (ETS) (the Consultation Paper).
Upon the UK’s withdrawal from the European Union, the UK ETS replaced the United Kingdom’s involvement in the EU ETS from January 1.
The key areas addressed by the FCA in the Consultation Paper include:
- consulting on the UK Emission Trading Scheme Instrument 2021;
- proposing amendments to various FCA Handbook modules, which include the Principles for Business and Senior Management Arrangements, Systems and Controls, among other modules and guides; and
- consulting on the Technical Standards (Market Abuse Regulation) (UK Emissions Trading Scheme) Instrument 2021, which proposes changes to certain technical standards under the UK Market Abuse Regulation.
The consultation closes on April 6, so the FCA’s rules are in place before the first post-Brexit UK ETS auction is held, which should be no later than the second quarter of 2021.