ASIC has urged those currently registered to provide financial services in emissions units to act now to apply for an Australian financial services (AFS) licence.

From 1 July 2012, emissions units recognised under the carbon pricing mechanism are also financial products under the Corporations Act 2001. Any individual or company providing financial services in emissions units and related derivatives requires an AFS licence or licence variation, unless exempt.

People who registered their intent to provide financial services in emissions units earlier this year must now apply for an AFS licence by no later than 31 October 2012. If an application isn’t lodged, registrants must stop offering these services.

New entrants to the carbon markets can apply for an AFS licence or licence variation with an authorisation for emissions units at any time. ASIC must issue an AFS licence before services are provided.

ASIC has developed a range of resources to assist those providers applying for an AFS licence or varying a current licence. These resources include Information Sheet 156 Regulated emissions units: Applying for or varying an AFS licence (INFO 156) and general guidance on how the financial services regime applies to emissions units and carbon markets. For more details, visit ASIC’s carbon webpage at www.asic.gov.au/carbon.

ASIC reminds all carbon registrants and other new entrants to take the time to consider these publications as they provide specific guidance on the supporting material required with a licence application. Applications that are incomplete or fail to provide sufficient depth to allow us to determine whether an applicant is likely to meet its licensing obligations may be returned. This not only delays the licence assessment process, but risks us not being able to make a decision on an application before the end of the transitional registration period on 31 December 2012.

In particular, applicants and their professional advisers need to ensure that the relevant knowledge and experience of their nominated responsible managers are properly demonstrated in their applications. Applicants who elect to demonstrate relevant knowledge by reference to a qualification need to also explain the relevant carbon markets content in that qualification. Alternatively, applicants may elect to use the ‘Option 5’ written submission approach described in INFO 156 if they have acquired relevant knowledge through means other than formal qualifications.

Key dates

• 31 October 2012 - If you are registered, you must apply for an AFS licence by 31 October 2012, or cease providing financial services after this date.

• 31 December 2012 - The registration of every registered person is cancelled on 31 December 2012.

• From 1 January 2013 - You must not provide financial services unless you hold an AFS licence.