Title page Carbon Markets Applying for an AFS Licence Sydney 21 - PowerPoint PPT Presentation

Title page Carbon Markets Applying for an AFS Licence Sydney 21 June 2012

Agenda Master style 1 • The Australian Financial Services Licence application process • Assessing responsible managers

ASIC Licensing & Registry Master style 3 Population

Master style 3 Transition to Licensing Getting Registered 1 May 12 Opening of Registration applications 30 June 12 Closing of Registration applications Becoming licensed 1 July 12 Opening of Licence applications 31 October 12 Registrants to have lodged applications Registrants cease business unless have applied 31 December 12 Registrants cease business unless Licensed Registrations cancelled NB: Registration is not mandatory, Licensing is mandatory (unless exempt). Licence applicants who have not registered cannot do business until they hold a Licence Registration does not involve any assessment

Master style 3 AFS Licence scope overview Services Products Clients CUs, ACCUs, EIEUs Personal &/or Retail &/or Advice General Wholesale Derivatives Deal on behalf of, OR CUs, ACCUs, EIEUs Arrange to deal Retail &/or Wholesale Deal by issuing &/or on behalf of, OR Derivatives Arrange to deal CUs, ACCUs, EIEUs Retail &/or Make a Market Wholesale Derivatives Asset type “Carbon” Operate registered MIS Retail Custodial or Holding of a financial Retail &/or depository product Wholesale service

AFS Licensee general obligations Master style 2 • Provide services efficiently, honestly, fairly • Have knowledge & skills for services • Have adequate financial & other resources for services • Manage conflicts of interest • Meet conduct & disclosure obligations, retail compensation (PI) & dispute resolution schemes • Compliance with Licence conditions & FS laws

Master style 3 AFS Licence application process VARY  Application (online) VARY  A5 Business Description carbon business plus new services / products VARY ? People Proofs NEW  new RMs only Lodge via VARY  B1 Organisational portal Competence carbon business RMs upload VARY ? B5 Financial only if carbon business raises Statements financial resource requirement Additional NEW and VARY ? Proofs depends on services and products selected NEW and VARY ? Requisitions depends on complexity & info provided

Master style 3 AFS Licence application process Application (online) • questionnaire-style • Intuitive forms FS01 & FS03 A5 Business Description • next questions adapt to answers • applicant details People Proofs • product/service/client selections B1 Organisational • basic business description Competence • responsible managers B5 Financial Statements • resources, systems, processes • selection-dependent questions Additional Proofs • declarations/certifications • submit all documentation online Requisitions

Master style 3 AFS Licence application process Application (online) • written submission • for “variation”, limited to carbon A5 Business Description business & any new services / products People Proofs • describe products, services, clients B1 Organisational • describe carbon business model Competence & plans B5 Financial • organisational chart Statements • description of your business will Additional assist Licensing in Proofs understanding your proposal • nature , scale & complexity Requisitions

Master style 3 AFS Licence application process Application (online) A5 Business • competency and good fame and Description character documents People Proofs • only required for new RMs • Statement of Personal B1 Organisational Information Competence • copies of qualifications B5 Financial • criminal history check Statements • bankruptcy check Additional Proofs • two business references • concession for APRA regulated Requisitions

Master style 3 AFS Licence application process Application (online) A5 Business • standard table format Description • knowledge and skills People Proofs • elaborating written submission (for RM option 5 only) B1 Organisational Competence • RM’s experience history – job title and role B5 Financial Statements – client types – services & product experience Additional Proofs • new and existing RMs need to substantiate carbon competence Requisitions

Master style 3 AFS Licence application process Application (online) A5 Business • financial statements Description • income, balance sheet, People Proofs cash flows, cash flow forecasts • ongoing compliance process B1 Organisational description Competence • other info for activities requiring B5 Financial extra financial resources Statements • base level as a minimum RG166 Additional • for “vary”, only required if new Proofs activities require extra resources • not required for APRA-regulated Requisitions

Master style 3 AFS Licence application process Application (online) A5 Business Description • various proofs according to People Proofs services / products B1 Organisational • only required for certain activities Competence or if requested by us • no specific single new carbon B5 Financial Statements proof • for “variations”, only typically Additional required if prior proofs for current Proofs business not as applicable for carbon Requisitions

Master style 3 AFS Licence application process Application (online) A5 Business Description People Proofs B1 Organisational • written responses to our queries Competence • queries to clarify B5 Financial Statements • queries to elaborate • queries to fill information gaps Additional Proofs • only required for the purposes of Licensing making a decision Requisitions

Your responsible managers Master style 2 • Competence to provide your financial services = having responsible manager(s) who – are directly responsible for significant day-to-day decisions about the provision of your financial services – have appropriate knowledge and skills for all of your financial services and products – are of good fame and character

Your responsible managers Master style 2 • Competence to provide your financial services = having responsible manager(s) who – may be more than one to cover all competencies required of a licensee – may be designated as “key person” on a licence

Appropriate knowledge & skills Master style 2 For example Product knowledge What are the units? What are scheme rules? Market experience Overseas carbon markets Australian “green” markets Service experience As an adviser As a dealer or market-maker Regulatory competence To meet obligations of an AFS licensee

Showing knowledge & skills Master style 2 • RG 105 options emphasise relevance Option Knowledge Experience 1 Industry- or APRA- 3 years in past 5 standard 2 Individual assessment to 5 years in past 8 diploma-equivalent 3 Degree + industry course 3 years in past 5 4 Industry- or product- 3 years in past 5 specific diploma 5 Written submission demonstrating appropriate knowledge and skills

Showing knowledge & skills Master style 2 • RG 105.66 submission must explain Element Carbon focus Role Involvement in carbon services Qualifications Carbon/enviro market content Experience How acquired carbon knowledge Prior carbon/green market experience Prior services experience eg advising Why eligible Regulatory compliance expertise as an RM Knowledge of nature of units and their issuance, usability, bankability, price regulation, transferability

Key Points Master style 1 • Same application process as for all products, and less content for variation applications • Apply and lodge online • Special carbon focus is on - your carbon market activities - your responsible managers expertise • Refer RG 236 “Do I need an AFS Licence to participate in carbon markets?” • Forthcoming INFOsheet for application detail

Title page ASIC Timothy Thomas 03 9280 3315 tim.thomas@asic.gov.au Craig McBurnie 02 9911 5362 craig.mcburnie@asic.gov.au 21 June 2012