ARTICLE · 01 JUNE 2012

Will I need an AFS Licence to deal in regulated carbon emissions units?

Norton Rose Fulbright Australia

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The proposed characterisation of Regulated Emissions Units as "financial products" will apply from 1 July 2012.

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Introduction

As readers may be aware from previous Norton Rose Australia alerts, it was proposed that "Australian carbon credit units" and "eligible international emissions units" and "carbon units" (Regulated Emission Units) be regulated as "financial products" under the Corporations Act 2001 (Cth) (Corporations Act). This was in line with the government's aim to "provide a strong regulatory regime to reduce the risk of market manipulation and misconduct" in relation to such carbon products.

The proposed characterisation of Regulated Emissions Units as "financial products" will apply from 1 July 2012 and will mean that entities that are involved in transactions involving these products need to assess whether such transactions trigger the need for an Australian financial services licence (AFS Licence).

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