Ruling kills Romanian OTC carbon permit trading

Romania’s securities regulator have defined European Union carbon permits as financial instruments, a move which will force all its emissions trading onto one of the country’s exchanges.

Emissions traders in eastern Europe said the unilateral ruling on Tuesday is possibly illegal and effectively kills off Romania’s over-the-carbon (OTC) permit trading market under the EU’s $100 billion emissions trading scheme.

The ruling prevents foreign firms from trading Romanian EUAs without joining the Sibiu Monetary-Financial and Commodities Exchange (SIBEX), currently the only Romanian exchange licensed to trade EUAs, the exchange’s deputy director told Reuters.

“Foreign traders can no longer intermediate in Romania with such certificates unless they become members of the markets that can trade, meaning SIBEX at the moment,” said Darius Cipariu.

“As securities, they are brought on a transparent, organized market where quotations are visible for all participants … there are no more OTC transactions,” he added.


Romania’s National Securities Commission have classified carbon credits as securities and said legal provisions under the country’s capital markets now apply to any firm trading EUAs.

The commission limits trading in capital market to “financial investment firms authorized by the National Securities Commission, lending institutions authorized by the Romanian Central Bank … as well as similar entities authorized in EU and non-EU member states.”

“The ruling complicates things, but I don’t think Romania can act by itself on this,” said Pascal Barkats of brokers Isramart, which have offices in both Romania and New York.

“(EUAs) are now exempt from VAT. This facilitates transactions between Romanian operators and transactions with foreign partners,” he said.



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