Carbon Trading and 'Green' Investments
During the past few years, the GFSC has received a number of enquiries or otherwise become aware of companies being incorporated in Gibraltar which are either trading in "carbon credits" or investing into forestry or other 'green' schemes.
Whilst these companies would usually seek investment from persons outside Gibraltar, local residents may also be targeted by firms operating outside Gibraltar.
The GFSC does not regulate the sale or trading of carbon credits. It does however regulate Collective Investment Schemes (CIS) under the Financial Services (Collective Investment Schemes) Act 2011 and certain types of exchange contracts (often called 'futures'), and a firm must be authorised by the GFSC to promote or operate these in or from within Gibraltar.
The GFSC can only take action over a carbon credit trading scheme when it is being promoted or operated as a CIS or futures contract, without authorisation in or from within Gibraltar.
A carbon credit is a certificate or permit which represents the right to emit one tonne of carbon dioxide (CO2) and these can be traded for money.
Potential investors may be offered carbon credit certificates, or an opportunity to invest directly in a 'green' scheme or project that generates carbon credits as a return on their investment.
The contact is usually unsolicited, with most operators 'cold-calling' investors, but potential investors could also be contacted via other methods.
Whilst not all carbon credit trading schemes are fraudulent, it is often not made clear to investors that trading on these markets carries a lot of risks.
Investors may lose money on their investments by not being able to sell, or at least get a competitive rate, when trading a small volume of carbon credits.
Sales persons 'cold-calling' investors may use a lot of impressive references to government involvement in their scheme, or to the Kyoto Protocol, Rio Summit, etc.
Please make a careful consideration of what is being offered to you, rather than be swayed by such jargon.
Other 'Green' Investments
Companies may also employ similar methods when seeking new investors for investing in forestry or other plantations, typically in South America or Asia. The GFSC recommends that potential investors exercise similar caution if approached by a company soliciting investments into such a scheme.
Gibraltar Investor Compensation Scheme (GICS)
Please note that non-regulated entities or schemes will not be covered by GICS, so investors will not be protected by the scheme should things go wrong.