You have until 30 June 2012 to register with ASIC if you want to
deal in carbon emission units. On the next day, 1 July, they become
financial products. If you register by 30 June, you will be able to
provide financial services in relation to emission units from 1
July, even if you don't have an Australian financial services
licence (AFSL) or your AFSL does not cover emission units. This
grace period for registered persons continues until 31 December
2012, with an important condition: you must apply for your AFSL (or
licence variation) by 31 October 2012, or otherwise stop providing
the emissions unit financial services from that date. From 1
January 2013, you can't provide financial services in relation
to emissions units unless you have an AFSL authorising the
How to register
There is a form for ASIC registration (
FS91), available from its website. When you register you must
identify the types of financial services you plan to provide. You
can choose from:
Financial product advice
General financial product advice
Dealing in a financial product
Arranging for a person to deal in a financial product
Make a market for a financial product
Provide a custodial or despository service
For each of these categories except the last you can also
nominate the type of emission unit financial product (carbon units,
Australian carbon credit units and eligible international emissions
units) that you want to deal with.
Registration as an interim step will give ASIC more time to
licence people, given the short timeframe before the legislation
commences on 1 July. A similar two step process was used in 2010-11
for the introduction of Australian credit licences.
If you don't need a licence authorisation for the second half
of 2012, you would not have to use the registration process and
could simply follow the normal process of applying for an AFSL or
licence variation as applicable.
Additional requirements if you have retail clients
As well as having to apply for a licence or licence variation by
31 October, registrants providing financial services to retails
clients must by 1 July 2012 be a member of an ASIC approved
external dispute resolution (EDR) scheme and have professional
indemnity insurance in place that complies with ASIC's policy
Training and financial requirements for licensees
Following the release of its consultation paper on training and
financial requirements in March (
CP175), on 2 May ASIC released its final guidance on these
The ASIC regulatory guide on training for licensees (
RG146) has been updated to include the specialist knowledge
requirements for an adviser providing advice on emissions units.
Advisers will have until 31 December 2013 to complete these
As for financial requirements, ASIC decided that the existing
requirements for Australian financial services licensees in
RG166 were sufficient and that changes were not needed for
these to apply to persons providing financial services in relation
to emission units.
The final regulations dealing with exemptions from the licensing
requirements were made on 5 April in the Corporations Amendment
Regulation 2012 (No. 1) (Cth). One important change from the draft
regulations released in February (discussed in our 21 March
article) is the widening of the exemption for persons dealing
in an emission unit on behalf of a related body corporate or an
associated entity that is a liable entity under the Clean Energy
Act 2011 (Cth). It had been proposed that this exemption would only
apply to dealings in carbon units, but the final regulations also
apply the exemption to Australian carbon credit units and eligible
international emission units.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
Kemp Strang has received acknowledgements for the quality of
our work in the most recent editions of Chambers & Partners,
Best Lawyers and IFLR1000.
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