ASIC has issued a Regulatory Guide (RG 236) addressing the requirement for certain market participants who intend to offer financial services, deal in financial products and provide financial advice, or, are already offering such services to hold an Australian Financial Services Licence with the appropriate licence conditions to do so.
Carbon market related products have not been grandfathered under existing derivative or commodity classifications and there is no grace period for licence condition amendments prior to the 1st July 2012 commencement of the scheme.
If your firm is one or more of the following categories of carbon market product service providers, or intends to offer such services post 1st July 2012, it may well be captured under the new regime.
Does your firm offer financial services?
These have been defined as ‘providing financial product advice’, ‘dealing in a financial product’, ‘making a market for a financial product’, ‘operating a registered management investment scheme’, ‘providing a custodial or depository service’ or ‘providing traditional trustee company services’ then your firm needs to be appropriately licenced before 1st July, 2012.
Does your firm deal in financial products?
If you currently ‘apply for or acquire a financial product’ (buy), ‘issue a financial product’ (originate), ‘trade in securities or managed investment schemes’, ‘underwriting the securities or interest’ (trade), ‘vary a financial product’ (offer structured products) or ‘dispose of a financial product’ (sell) your firm needs to be appropriately licenced before 1st July, 2012.
The product types include shares, interest in managed investment schemes, debentures and derivatives as well as the new classes of Australian carbon credit unit and eligible international emissions unit as defined under the Corporations Act 2001 (Cth).
Does your firm provide financial advice?
If you or your firm provide financial advice either personal or general including the issuing of newsletters or client briefings which may infer (even if not directly stating) when to buy, hold or sell a particular stock, security or carbon market related product, then you will need to be duly and properly licenced to provide such services to the new carbon market.
Do you already hold an Australian Financial Services Licence?
Even if you currently hold an Australian Financial Services licence and intend to participate in the upcoming carbon markets, to legally deal in financial products specifically ACCUs (Australian carbon credit units) and eligible international emissions units such as CERs (Certified Emissions Reductions), ERUs (Emission Reduction Units and RUs (Removal Units) you will need to have your existing licence varied before the 1st of July 2012 remembering that there is no licence condition grandfathering nor licence grace period.
How can Certainty help?
Certainty Compliance can assist you in understanding all your regulatory obligations, and ensure you have systems, policies and procedures in place to comply with them. Please contact a consultant on (02) 8324 5300 or enquiries@certaintycompliance.com.au to discuss our services.
For further information:
See the full ASIC media release here: 12-45AD ASIC releases guidance and policy proposals for carbon financial products