GEM built its first trading platform in 2011 for Carbon Trade Exchange, which facilitates trading in Carbon Credits and Emission Allowances. Since then we have developed markets for water and Renewable Energy Certificates. Case studies of each of these markets are available here. We have already used the CTX technology to develop parallel spot exchanges for the US Regional Greenhouse Gas Initiative (RGGI), the Californian cap-and-trade program, and the European Union’s Emissions Trading Scheme (EU ETS), and it is actively seeking opportunities to licence or develop technology for operators in other compliance markets.
Following the Global Financial Crisis a trend has developed where products previously traded over-the-counter (OTC) have moved towards exchange traded environments in an attempt to reduce risk and increase control, by increasing standardisation, capacity and functionality. OTC bi-laterally traded products and derivatives are being replaced with homogenised contracts listed on transparent electronic trading venues often cleared by a central counter party (CCP) and settled using straight through order processing on a delivery versus payment basis.
We recognised that the technology GEM had developed was simple and secure leading to more efficient market places while still delivering fair, orderly and transparent trading. This trend towards electronic trading is a unique opportunity for GEM which is positioned with the technology, experience and global reach to provide your marketplace with this same innovation.