The clearing house of the Swiss SIX Group acts as a partner for both trading parties in the clearing and settlement of a transaction. Bayerische said that carbon certificate trading will now be faster and more secure.
During the clearing process, the CCP divides the purchase or sale of carbon credits on greenmarket into two separate and independent transactions.
SIX x-clear acting as the central partner for all greenmarket members will eliminate the risk of default by securing both the sale and purchase sides, in addition to replacing direct contact between buyer and seller, thereby guaranteeing post-trade anonymity.
The function of the CCP will also practically eliminate the potential for value added tax fraud. The “reverse charge rule” under which purchasers, not sellers, must pay value added tax has been in effect in Germany since 1 July 2010; in addition, zero value added tax now applies to carbon trading in Switzerland – the domicile of SIX x-clear. Carousel fraud has thus been beaten.
