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

Title page

Carbon Markets

Applying for an AFS Licence

21 June 2012 Sydney

Master style 1

Agenda

• The Australian Financial Services Licence

application process

• Assessing responsible managers

Master style 3

ASIC Licensing & Registry 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 Advice Personal &/or General CUs, ACCUs, EIEUs Retail &/or Wholesale Derivatives Deal on behalf of, OR CUs, ACCUs, EIEUs Retail &/or Wholesale Arrange to deal Deal by issuing &/or on behalf of, OR Derivatives Arrange to deal Make a Market CUs, ACCUs, EIEUs Retail &/or Wholesale Derivatives Operate registered MIS Asset type “Carbon” Retail Custodial or depository service Holding of a financial product Retail &/or Wholesale

Master style 2

AFS Licensee general

• bligations
• 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

Application (online) A5 Business Description People Proofs B1 Organisational Competence B5 Financial Statements Additional Proofs Requisitions NEW  VARY  VARY  carbon business plus new services / products VARY ? new RMs only VARY  carbon business RMs VARY ?

• nly if carbon business raises

financial resource requirement NEW and VARY ? depends on services and products selected NEW and VARY ? depends on complexity & info provided Lodge via portal upload

Master style 3

AFS Licence application process

Application (online) A5 Business Description People Proofs B1 Organisational Competence B5 Financial Statements Additional Proofs Requisitions

• questionnaire-style
• Intuitive forms FS01 & FS03
• next questions adapt to answers
• applicant details
• product/service/client selections
• basic business description
• responsible managers
• resources, systems, processes
• selection-dependent questions
• declarations/certifications
• submit all documentation online

Master style 3

AFS Licence application process

Application (online) People Proofs B1 Organisational Competence B5 Financial Statements Additional Proofs Requisitions A5 Business Description

• written submission
• for “variation”, limited to carbon

business & any new services / products

• describe products, services,

clients

• describe carbon business model

& plans

• organisational chart
• description of your business will

assist Licensing in understanding your proposal

• nature , scale & complexity

Master style 3

AFS Licence application process

Application (online) A5 Business Description People Proofs B1 Organisational Competence B5 Financial Statements Additional Proofs Requisitions

• competency and good fame and

character documents

• only required for new RMs
• Statement of Personal

Information

• copies of qualifications
• criminal history check
• bankruptcy check
• two business references
• concession for APRA regulated

Master style 3

AFS Licence application process

Application (online) A5 Business Description People Proofs B1 Organisational Competence B5 Financial Statements Additional Proofs Requisitions

• standard table format
• knowledge and skills
• elaborating written submission

(for RM option 5 only)

• RM’s experience history

– job title and role – client types – services & product experience

• new and existing RMs need to

substantiate carbon competence

Master style 3

AFS Licence application process

Application (online) A5 Business Description People Proofs B1 Organisational Competence B5 Financial Statements Additional Proofs Requisitions

• financial statements
• income, balance sheet,

cash flows, cash flow forecasts

• ongoing compliance process

description

• other info for activities requiring

extra financial resources

• base level as a minimum RG166
• for “vary”, only required if new

activities require extra resources

• not required for APRA-regulated

Master style 3

AFS Licence application process

Application (online) A5 Business Description People Proofs B1 Organisational Competence B5 Financial Statements Additional Proofs Requisitions

• various proofs according to

services / products

• only required for certain activities
• r if requested by us
• no specific single new carbon

proof

• for “variations”, only typically

required if prior proofs for current business not as applicable for carbon

Master style 3

AFS Licence application process

Application (online) A5 Business Description People Proofs B1 Organisational Competence B5 Financial Statements Additional Proofs Requisitions

• written responses to our queries
• queries to clarify
• queries to elaborate
• queries to fill information gaps
• only required for the purposes of

Licensing making a decision

Master style 2

Your responsible managers

• 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

Master style 2

Your responsible managers

• 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

Master style 2

Appropriate knowledge & skills

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

Master style 2

Showing knowledge & skills

Option Knowledge Experience 1 Industry- or APRA- standard 3 years in past 5 2 Individual assessment to diploma-equivalent 5 years in past 8 3 Degree + industry course 3 years in past 5 4 Industry- or product- specific diploma 3 years in past 5 5 Written submission demonstrating appropriate knowledge and skills

• RG 105 options emphasise relevance

Master style 2

Showing knowledge & skills

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 as an RM Regulatory compliance expertise Knowledge of nature of units and their issuance, usability, bankability, price regulation, transferability

• RG 105.66 submission must explain

Master style 1

Key Points

• 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