ASICs role in carbon markets
ASIC regulates registered companies, financial markets, and providers of financial services and credit services.
We licence and monitor businesses that provide financial services in financial products to ensure that they operate efficiently, honestly and fairly.
ASIC is also responsible for the supervision of operators of financial markets and clearing and settlement facilities and of the market participants.
More about ASIC's role as regulator
- Emission units as financial products
- Providing financial services in emissions units
- Operating financial markets in emissions units
Emissions units as financial products
Australian carbon credit units (ACCUs) and eligible international emissions units (EIEUs) are specified as financial products in the Corporations Act 2001 (Corporations Act) and the Australian Securities and Investments Commission Act 2001 (ASIC Act).
Other emissions and environmental units – such as Renewable Energy Certificates (RECs), Energy Savings Certificates (ESCs), Victorian Energy Efficiency Certificates (VEECs) and European Union Allowances (EUAs) – are not specified as financial products in the Corporations Act or the ASIC Act.
We refer to emissions units which are also financial products, as ‘regulated emissions units’.
Financial products in carbon markets can also be products that are related to any type of emissions or environmental units – such as derivatives over emissions units or interests in a managed investment scheme involving carbon abatement activities or emissions units.
Providing financial services in emissions units
Unless you are exempt, you must have an Australian financial services (AFS) licence from ASIC to carry on a financial services business in these regulated emissions units or emissions-related financial products, whether those services are in relation to the Emissions Reduction Fund or for another market or purpose.
Holding an AFS licence does not authorise you to provide any kind of financial service. An AFS licence is issued with specific authorisations for the licensee to:
- provide specified types of financial services
- for specified financial products or classes of financial products, and
- to either wholesale clients or retail clients or both wholesale and retail clients.
RG 236 details when you may require an AFS licence to trade in emissions
Financial services licensing for emissions markets
Operating financial markets in emissions units
If you wish to operate a financial market in Australia in emissions units, you must obtain an Australian market licence from ASIC to do so, or otherwise be exempted by the Minister.
Markets licensing for emissions units
