ASIC has today released its final policies on adviser training and financial requirements for entities and individuals providing financial services in relation to emissions units following a public consultation (refer Consultation Paper 175 Carbon markets: Training and financial requirements (CP 175)).
The relevant policies are Regulatory Guide 146 Licensing: Training of financial product advisers (RG 146), which sets out ASIC’s minimum standards for the training of all advisers providing financial product advice to retail clients and Regulatory Guide 166 Licensing: Financial requirements, which sets out our current policy on financial requirements for Australia financial services (AFS) licensees (RG 166).
RG 146 now contains guidance on specialist knowledge requirements for advisers providing financial product advice to retail clients on emissions units. This new content will help advisers ensure they are fully trained and competent to provide financial product advice to retail clients on these products.
Following consultation, we have determined that no specific updates are required to RG 166 and that AFS licensees providing financial services for regulated emissions units should meet the current requirements of RG 166.
As this may be the first time many entities will come under ASIC’s regulation, ASIC has also released an updated version of our Regulatory Guide 236 Do I need a licence to participate in carbon markets? (RG 236).
RG 236 is designed to help entities and individuals understand whether they require an AFS licence to provide financial product advice and other financial services in relation to carbon markets and emissions units, and, if so, details the next steps and where people can find more information. The version released today reflects legislation made since the regulatory guide was first released earlier this year, as well as providing further guidance on when advice provided to liable entities may constitute financial product advice.
These updated policy documents follow the release earlier this week of information about the registration and licensing process for those intending to provide financial services in emissions units (see media release 12-82MR). More information is available from the ASIC website.
Background
Due to commence on 1 July 2012, the carbon pricing mechanism will require certain entities to incur a charge for their carbon emissions, unless they acquire and surrender the number of emissions units that represents their total annual emissions. The related Carbon Farming Initiative will allow individuals to generate emissions units through domestic emissions offset projects that reduce or sequester carbon emissions.
The Clean Energy Legislative Package includes the Clean Energy Act 2011 (Clean Energy Act), which is the main piece of this legislation establishing the carbon pricing mechanism and the Carbon Credits (Carbon Farming Initiative) Act 2011 (CFI Act), which covers the Carbon Farming Initiative. More information about the Clean Energy Legislative Package is available at www.climatechange.gov.au.
From 1 July 2012, emissions units recognised under the carbon pricing mechanism will also be financial products under the Corporations Act 2001, and persons that carry on a business of providing financial services in relation to emissions units may require an AFS licence.
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