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The draft of the Commission Regulation establishing a Union Registry – the finality of transfers rules and other details for the new security measures revealed - Page 2
Monday, 09 May 2011 06:00


2. 24h delay in effecting transfers

 

As regards the execution of transfers the Regulation envisions the application of a delay of 24 hours between initiation and the transfer being communicated for finalisation for all transfers of allowances and Kyoto units. During this 24-hour delay an account representative may propose to the national administrator the cancellation of the transfer on the grounds of a suspicion that the transfer was initiated fraudulently (Article 36 of the Regulation).


3. View-only access


In addition to the described in point 1 above types of representatives accounts may also have authorised representatives with view only access to the account (under the earlier Regulation No 920/2010 the only-view-the-account feature was a possible option for additional authorised representatives).

 

Such a measure will enable additional services offered by certain market participants like ‘Safe Zone’ trading market launched by BlueNext in May. According to information on the Exchange’s website ‘Only units whose chain of title can be traced back to their source will be allowed to trade thereafter on BlueNext. This will create a significant barrier to current and future fraud for BlueNext and its members; and help restore the stability and strength of the Spot price. To achieve this, members of the exchange must give Read-Only access to their operator allowance accounts. BlueNext will then securely trace back the chain of title back to its source of issuance. Only by tracking the chain of the title to the source can the market be assured that there is no question to a permits’ integrity and hence value or ability to be used as a compliance instrument’.

 

4. Finality of transfers


Subject to very limited exceptions under the Regulation transfers of allowances and Kyoto units in the Registry are final and irrevocable upon finalisation of the transaction. Pursuant to the Article 37(2) ‘no law, regulation, rule or practice on the setting aside of contracts and transactions shall lead to the unwinding of a transaction that has become final and irrevocable under this Regulation’. Article (37(1) stresses that ‘holding an allowance or Kyoto unit in the Union Registry shall constitute conclusive evidence of the account holder's ownership of the allowance or Kyoto unit. Transfer of an allowance or Kyoto unit in the Union Registry shall constitute conclusive evidence of the change of ownership of the allowance or Kyoto unit’.

 

The one of the sparse exceptions relates to a transaction completed after a relevant judicial or administrative authority has handed down a decision opening insolvency proceedings in respect of the account holder initiating the transaction.

 



 

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