September 23, 2015 Sacramento, CA Zhang Xiaoguang Sinocarbon Innovation & Investment Co.,Ltd. T ITLE ADMINISTRATION OF REGISTRY IN CHINA W ORKSHOP “B UILDING R EGISTRIES TO S UPPORT THE N EXT G ENERATION OF C ARBON M ARKETS ” P ARTNERSHIP FOR M ARKET R EADINESS

2 System to be managed Organizational structure Responsibilities of market participants Profile of administrators Risk mitigation measures Outline

3 Sub-systems of national registry system CCER Registry Management Allowance Registry Management Allowance Creation Allowance Allocation CCER Issuance Project information Management General registry Management Administrator Management System Configuration Management Allowance Deletion CCER Information management Account Management Account Representative Management Log Management General registry Management Transfer Management Cancelation Management

4 System to be managed Organizational structure Responsibilities of market participants Profile of administrators Risk mitigation measures Outline

5 Management entities NCSC authorized by NDRC DRCs of provinces Project owners Compliance enterprises Voluntary participants Management Entities Exchanges

6 Organizational structure of Management entities NCSC authorized by NDRC Provincial DRC Exchange …… Project owners Compliance enterprises Voluntary participants

7 System to be managed Organizational structure Responsibilities of market participants Profile of administrators Risk mitigation measures Outline

8 Administrator management Create administrator Change administrator information Change administrator authority Close administrator Create administrator Change administrator information Change administrator authority Close administrator National level administrator

9 System configuration management Set system operation configuration Set data exchange interface configuration Set system operation configuration Set data exchange interface configuration National level administrator

10 Allowance management Create allowances Allocate allowances to provincial DRC Delete allowances Auction allowances Create allowances Allocate allowances to provincial DRC Delete allowances Auction allowances National level administrators Allocate allowances to Enterprises Delete allowances Auction allowances Allocate allowances to Enterprises Delete allowances Auction allowances Provincial level administrators Transfer allowances Surrender allowances Cancel allowances voluntarily Transfer allowances Surrender allowances Cancel allowances voluntarily Account representatives

11 CCER management Create CCER Issue CCER Change project information Create CCER Issue CCER Change project information National level administrators Receive issued CCER Project account representatives Transfer CCERs Surrender CCERs Cancel CCERs voluntarily Transfer CCERs Surrender CCERs Cancel CCERs voluntarily Account representatives Confirm CCER pilot compliance Pilot administrator

12 Account management Create third party platform account Query account information Change account status Create third party platform account Query account information Change account status National level administrators Create holding accounts of the province Query holding account information of the province Change holding account status of the province Create holding accounts of the province Query holding account information of the province Change holding account status of the province Provincial level administrators

13 Account representative management Create third party platform account representative Query account representative information Change account representative status Create third party platform account representative Query account representative information Change account representative status National level administrators Create holding account representative of the province Query holding account representative information of the province Change holding account representative status of the province Create holding account representative of the province Query holding account representative information of the province Change holding account representative status of the province Provincial level administrators

14 Log management Query user activity audit logs Query transaction logs Query user activity audit logs Query transaction logs National level administrators Query transaction logs of the province Provincial level administrators Query transaction logs of the account Account representatives Query transaction logs by system links Trading systems of Exchanges

15 Non-functional management Providing support services Handling system operational issues Managing system updates Providing support services Handling system operational issues Managing system updates National level administrators Providing support services Provincial level administrators

16 System to be managed Organizational structure Responsibilities of market participants Profile of administrators Risk mitigation measures Outline

17 Profile of administrators General requirements: High credibility Acknowledge relevant carbon market principles Good quality in maintaining confidentiality of information Ability to use IT systems Rigorousness in executing business management operations Holding accountProvincial level National level Acknowledge relevant legislation Acknowledge information verification methods Capable of communicating with users Acknowledge business and functioning of registry Acknowledge relevant legislation Acknowledge information verification methods Capable of communicating with users Acknowledge carbon market regulations

18 System to be managed Organizational structure Responsibilities of market participants Profile of administrators Risk mitigation measures Outline

19 Administration risks Operational errors Fake customer identities Fraudulent activities Operational errors Fake customer identities Fraudulent activities Competent authorities Operational errors Fraudulent activities Operational errors Fraudulent activities User Mismatch in accounting records Trading systems of Exchanges

20 Risk mitigation measures Rigorous offline process Four eye principles Rigorous offline process Four eye principles Operational errors Detailed customer identity document requirements Rigorous KYC checks Detailed customer identity document requirements Rigorous KYC checks Fake customer identities System operation audit logs High level authentications Four eye principle Proper legislative regulations System operation audit logs High level authentications Four eye principle Proper legislative regulations Fraudulent activities Reconciliation Regulations for error handling procedures Reconciliation Regulations for error handling procedures Mismatch in accounting records

21 Zhang Xiaoguang Sinocarbon Innovation & Investment Co.,Ltd. For more information on the Partnership for Market Readiness, please contact: WORLDBANK. ORG WWW. THEPMR. ORG Thank You for Your Attention