Indiana Grain Company, LLC

Posted: 07/25/10

By: tomgrisafi

Green Exchange got its approval from federal futures regulators this week to launch a trading platform that will list contracts tied to credits and allowances for greenhouses gases.

The Commodity Futures Trading Commission said Friday it had approved the exchange's application Thursday. The announcement of its approval comes just one day after U.S. Senate Democrats decided to table a climate-change bill. That bill would have helped spur a much larger derivatives market to help companies offset their carbon emissions.

Green Exchange was introduced in 2007 under the New York Mercantile Exchange and a group of banks and brokerages. Its products have been listed at Nymex, which is now owned by CME Group. The CFTC said those products will now be listed on Green Exchange, which will become a stand-alone entity.

A spokesman for Green Exchange couldn't be immediately reached for comment.

"We think the Green Exchange has all the right elements to really compete in the marketplace, and achieving the milestone of this approval one of those elements," said Evan Ard, managing director of Evolution Markets, a founding member of the venture. "But there's still a lot of work to be done to effectively compete in the marketplace."

The CFTC's approval of the Green Exchange now sets the stage for competition between CME and its major rival IntercontinentalExchange Inc., which this year acquired the Climate Exchange PLC (CLE.LN) in a $597 million deal.

Source: Market Watch