The Montreal Climate Exchange (MCeX), a joint venture of the Montréal Exchange (MX) and the Chicago Climate Exchange(CCX), today officially launched trading of a new futures contract on Canada carbon dioxide equivalent (CO2e) units.

“The listing of the MCeX futures contract is a ‘first’ and it makes Montreal Climate Exchange the first regulated environmental market in Canada,” said Luc Bertrand, president and CEO of MX, deputy CEO of the new TMX Group and chairman of MCeX. “This is a historic milestone in the development of both the MX and the Canadian financial markets.”

Bertrand was speaking to an official MCeX launch ceremony in the presence of Quebec Premier Jean Charest, Federal Environment Minister John Baird and Federal Public Works and Government Services Minister Michael M Fortier. Also attending were representatives of MCeX market makers –Orbeo, TD Securities Inc. and TradeLink LLC — and a group of MCeX business partners.

After a short countdown, fully automated trading in the MCeX futures contract was launched at 9:30 am on the MX SOLA platform.

“We know this is the first step in a gradual process of constructing environmental markets in Canada and attracting investors to participate,” Bertrand said. “Our goal is to position MCeX as a leading developer of market solutions that help industry reduce greenhouse gas emissions as efficiently as possible.”

“Our launch of the Montreal Climate Exchange will help establish Canada at the forefront of environmental finance and integrated international emissions trading,” said Richard Sandor, chairman and Founder of the Chicago Climate Exchange, which operates the world’s first greenhouse gas emissions reduction and trading system, now with members and project participants worldwide.

The MCeX carbon futures contract has been designed specifically to help industrial participants to manage their emissions risks at the lowest cost while also creating continuous incentives for technological innovations that reduce greenhouse gas emissions. The market is expected to bring together a variety of participants including large regulated emitters, investors in voluntary emissions reduction projects, financial institutions, institutional investors, hedge funds and insurance companies.

Sandor pointed out that MCeX, like CCX, the Chicago Climate Futures Exchange and European Climate Exchange, offers investors in emerging environmental markets important advantages. “We add value the way regulated exchanges always do – by offering traders transparency, liquidity, open access to information, standard contracts, clearing services and, above all, efficient price discovery,” he said.

Trading of the MCeX contract is conducted using the MX electronic trading platform. MX settles and guarantees contracts through its clearing house, the Canadian Derivatives Clearing Corporation, which is AA rated by Standard and Poor’s.