On Jul. 17, ASX said environmental futures will be launched on Jul. 29.
ASX notified it has formally lodged the environmental futures rules and procedures with AST ASIC for the launch of ASX environmental futures on Jul. 29, 2024.
It published Amendments to ASX 24 operating rules (rules and procedures), re same.
ASX issued product factsheet ASX environmental futures, which has more information.
Follows ASX Sep. 2022 published ASX annual general meeting addresses, #149399.
Background
ASX environmental futures are designed to support Australia and NZ's decarbonization efforts as well as clean energy transition by providing a transparent forward curve.
This is for the market to hedge and price the energy transition re emissions reduction.
Environmental Futures
ASX specified 3 environmental futures contracts, covering large generation certificates (LGCs), New Zealand emissions units (NZUs), Australian carbon credit units (ACCUs).
Each product is listed out to 5 years; they are deliverable into the ASX clear (futures) account maintained at the relevant Environmental Registry; ASX clear (futures) will effect delivery with clearing participants acting on behalf of the end clients.
Preparations
Participants are encouraged to review the rules and procedures and product factsheet.
Participants wanting to trade futures should contact clearing participant to ensure they are aware of listing and intend to clear new products from go live; participants wanting to go to delivery should ensure registry account is set up before first delivery in 2025.
Effectiveness
Environmental futures will be launched on Jul. 29, 2024; revised rules and procedures will take effect on Jul. 29, 2024 as well, subject to final regulatory approval.
Jul. 18, 2024 Fee Waiver
On Jul. 18, 2024, ASX said it will temporarily waive fees on all environmental futures transactions for a period of 3 months, commencing the first day of trading.
The fee waiver will run from Jul. 29 2024 to Oct. 31, 2024 (inclusive) and will cover all transaction types on exchange, blocks, and exchange for physical.
Jul. 25, 2024 Go Live Confirmation
On Jul. 25, 2024, ASX issued notice to remind that ASX environmental futures will go live on Jul. 29, 2024, with the rules and procedures coming into effect on same day.
It also reminded about fee waiver above, as well as some steps that need to be taken.
Jul. 26, 2024 Revised Operating Rules
On Jul. 26, 2024, ASX published revised ASX clear (futures) operating rules - part 6 mandatory cash settlement and delivery procedures, forward dated Jul. 29, 2024.
Includes revisions regarding launch of environmental futures; revisions regarding Wallumbilla natural gas futures contract delivery procedures, #122662, #149636.
It also issued revised ASX clear (futures) operating rules - procedures determinations and practice notes, which contains numerous pages forward dated as Jul. 29, 2024.
Revisions include insertion of rule 67 with respect to environmental futures contracts.
In addition, inserted 66.1(d) in schedule 3 titled prescribed times, re open contracts.
Jul. 29, 2024 Contract Launch
On Jul. 29, 2024, ASX announced that it has listed three first environmental futures contracts, which will allow participants to price and hedge emissions reduction risks.
The contracts are available on ASX 24 Market, include LGC, ACCU, NZU futures, aim to provide a liquid, transparent, forward pricing curve on an annual basis out to 5 years.
Allow registered participants to make/take delivery of underlying certificates/units at settlement which can then be surrendered to the government to offset emissions.
Contracts are standardized, with each equaling 1,000 underlying LGCs/ACCUs/NZUs.
The futures will support OTC ACCU market where certain methods and co-benefits are valued differently, and help mobilize capital to meet longer-term emission targets.
Aug. 2024 Wallumbilla Natural Gas
On Aug. 20, 2024, ASX listed deliverable Wallumbilla Natural Gas Futures contract, extending portfolio of transitional energy as well as carbon market derivatives.
Jointly developed with the Australian Energy Market Operator (AEMO), contract helps participants more effectively manage risk amid the transition to clean energy.
ASX is currently exploring the potential to expand into other domestic regional gas markets through additional futures contracts, pending internal, regulatory approvals.
Oct. 2024 Reminder on End of Fee Waiver
On Oct. 8, 2024, ASX reminded that temporary fee waiver will end on Oct. 31, 2024.
Also provided details of the new fee schedule taking effect from Nov. 1, 2024.
Oct. 11, 2024 Editorial Update
On Oct. 11, 2024, Reg-Track made an editorial update to the sub-heading dated Oct. 8, 2024 above, to add further detail and an additional link to a document published by ASX.
Regulators
ASX
Entity Types
B/D; Corp; Exch; FCM
Reference
Nt 1146.24.10, 10/8/2024; PR 8/20/2024; PR 7/29/2024; RF 6/26/2024; Nt 0831.24.07, 7/25/2024; Nt 0799.24.07, 7/18/2024; Nt 0793.24.07, Info, RF, 7/17/2024; ESG;
