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April 12, 2012

Carbon units financial licensing requirements

Corporations Amendment Regulation 2012 (No. 1) was registered on 11 April 2012.

This regulation amends the Corporations Regulations 2001 to recognise Australian carbon credit units issued under the Carbon Farming Initiative, eligible international emissions units issued in accordance with the Kyoto rules or another relevant international agreement and carbon units issued under the Clean Energy Legislation, as financial products from 1 July 2012.

The regulations provide a transitional period for a person until 31 December 2012 to enable persons to apply for a licence to provide a financial service in relation to a carbon unit, an Australian carbon credit unit, or an eligible international emissions unit before the licensing requirements commence. A person must not provide a financial service in relation to carbon units, Australian carbon credit units, or eligible international emissions units unless the person holds a licence authorising the person to provide the financial service or is registered to provide the financial service.

– From 1 May 2012 to 30 June 2012, a person may apply to be registered to provide the financial service;

– From 1 May 2012 to 31 October 2012, a person is to apply for a licence to provide the financial service; and

– From 1 May 2012 to 31 December 2012 is the period for Australian Securities and Investments Commission (ASIC) to process licence applications. At the end of this period the registration of every registered person is cancelled.

The regulations also impose a range of disclosure obligations in particular circumstances in lieu of providing a Product Disclosure Statement. These obligations modify the Product Disclosure Statement requirements for ACCUs, EIEUs and carbon units in certain circumstances by requiring entities to provide clients with the website address of the Clean Energy Regulator and inform them of the information in the Regulator’s statement.

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Posted 12th April 2012 by David Jacobson in Corporations Act, Environment