The legal framework of the trading scheme does not regulate how and where the market in allowances takes place. Companies with commitments may trade allowances directly with each other, or they may buy or sell via a broker, bank or other allowance market intermediary.
It could also be the case that a company purchasing a fossil fuel (coal or gas) will be offered allowances in combination with the fuel. Finally, organised markets (allowance exchanges) may develop.
There is also be an electronic registry system. This registry system is separate from trading activity - not all trades result in changes in ownership of allowances, but where a trade culminates in a change in ownership there will be a transfer of allowances between accounts in the registry system.
In this way, the registry system is similar to a banking system which keeps track of the ownership of money in accounts but does not track the deals made in the goods and services markets which were the cause of the money changing hands. So the registry system is not a marketplace; the way in which allowances are traded is a decision made by the participants in the market.
The system is purely electronic, and so allowances are not printed on paper but exist only in an online registry account. Each company with a commitment and any person interested in buying or selling allowances needs an account. The system consists of a national component in each Member State where the allowances are held and a hub at European level, which conducts automated checks on each transfer of allowances to ensure that the rules of the Directive are respected. Some of the data held in the registry will be released periodically, in accordance with UN rules and a forthcoming Regulation. A balance will be sought between environmental transparency and commercial confidentiality.