Improving market governance of the New Zealand Emissions Trading Scheme

Overview

The Government is engaging with stakeholders about its proposals to improve governance of the market for New Zealand Units (NZU). 

This engagement seeks feedback on the impact of treating NZUs as financial products, the leveraging of existing financial market legislation, and on alternative market governance proposals considered as part of the policy design phase.

Proposed changes include:

• Using existing financial legislation to regulate the market, which will prohibit insider trading and market manipulation. 
• Requiring market operators of NZU exchanges to be licensed as a financial product market. 
• Regulating NZU financial advice, transaction and/or custodial services to bring these in line with the Financial Markets Conduct Act.
• Improving transaction reporting to bring transparency to trading of NZUs, including the price and type of stakeholder buying or selling (while protecting sensitive information).
• Improving transparency in transactions and providing participants with an optional centralised exchange. 

The government is carrying out targeted engagement with stakeholders most impacted by the proposals. The consultation is also open to any member of the public who wishes to submit a response.

The consultation period runs from 17 November to 15 December 2022. Submissions will be accepted up until 24 December 2022. Feedback will inform NZ ETS market governance policy decisions which will be made in early 2023.

Read the consultation document [PDF, 2.4 MB]