Emission Allowance Trading following the Addoption of MiFID II
Translated title
Kvote- og kredithandel efter vedtagelsen af MiFID II
Author
Mortensen, Martin Chemnitz
Term
4. term
Education
Publication year
2014
Submitted on
2014-12-03
Abstract
Specialet undersøger, hvordan handel med emissionskvoter i EU forventes at ændre sig efter adoptionen af MiFID II. Med afsæt i drivhusgasser, Kyoto-protokollen og EU ETS gennemgås udviklingen i kvotesystemet, markedsaktører, handelspraksis (registre, børser, auktioner) og de udfordringer, der har ført til øget regulering, herunder svig i spotmarkedet for EUA’er. Specialets forskningsspørgsmål er: Hvilke lovændringer bringer MiFID II til kvotehandel i EU, og hvordan vil det påvirke handlen? Metodisk bygger arbejdet på en juridisk og dokumentbaseret analyse af direktiver og forordninger (MiFID/MiFIR og EU ETS), forarbejder, arbejdsdokumenter og konsekvensvurderinger, samt en overførsel af erfaringer fra reguleringen af andre finansielle instrumenter til kvotemarkedet. Specialet forventer, at fuld inklusion af kvoter som finansielt instrument under MiFID II vil øge gennemsigtighed, markedsintegritet og tilsyn, men også medføre betydelige ekstra efterlevelsesomkostninger for markedsdeltagere ved ikrafttrædelsen i 2017. Samlet set vurderes målsætningen om reduceret udledning at blive understøttet, men den konkrete markedsdynamik efter MiFID II forbliver usikker på baggrund af det tilgængelige materiale.
This thesis examines how emission allowance trading in the EU is expected to change following the adoption of MiFID II. Building on an overview of greenhouse gases, the Kyoto Protocol, and the EU ETS, it traces the evolution of the allowance system, market participants, and trading practices (registries, exchanges, auctions), as well as the challenges that motivated stronger regulation, including fraud in EUA spot markets. The research questions are: What legislative changes does MiFID II introduce for EU allowance trading, and how will these affect trading? Methodologically, the study uses a legal and document-based analysis of directives and regulations (MiFID/MiFIR and EU ETS), preparatory works, working documents, and impact assessments, and leverages lessons from the regulation of other financial instruments to infer likely effects on the allowance market. The thesis anticipates that fully classifying allowances as financial instruments under MiFID II will enhance transparency, market integrity, and supervision, but will also impose significant additional compliance costs on market participants upon its entry into force in 2017. Overall, the emissions reduction objective is expected to be supported, while practical market impacts after MiFID II remain uncertain based on the available evidence.
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