![]() But it’s more complicated when it comes to carbon offsets. This is all relatively straightforward when it comes to derivatives involving tangible commodities like wheat, which the CFTC has long regulated. Meanwhile, the CFTC’s job is to ensure that the crops actually get delivered, as per the contract. ![]() Farmers often use these kinds of contracts to guarantee their crops will sell for an agreed-upon price at the end of the harvest, protecting them from a downward swing in the market. Such contracts can help hedge against risk a futures contract, for example, guarantees the price for which a given asset will be sold at some point in the future. markets for derivatives, contracts between parties in which prices are derived from the value of an underlying asset or benchmark. The Commodity Futures Trading Commission, created by Congress in 1974, regulates the U.S. “There really is no one else.”Įxactly how they’ll do it, however, is uncertain. “The CFTC is uniquely situated to address this issue,” Phillips said. Just a few days later, the CFTC announced a new Environmental Fraud Task Force within its enforcement division, to help investigate cases of “fraud and misconduct” in offset-related markets. Last month, for example, the CFTC released a whistleblower alert asking the public for tips about fraud and manipulation in voluntary carbon markets - a “precursor” to bringing enforcement actions against market manipulators, according to Todd Phillips, a fellow at the think tank the Roosevelt Institute. This week, the commission held its second roundtable discussion on promoting “integrity for high quality carbon credit derivatives,” and other recent actions suggest that it’s gearing up for a more proactive regulatory role in this space. One of these is the Commodity Futures Trading Commission, or CFTC, an independent government body charged with ensuring the stability of the country’s derivatives markets. ![]() Now, federal regulatory agencies are beginning to take note.
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