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CORPORATIONS REGULATIONS 2001 - REG 7.6.02AGA

Further modification of section 911A of the Act

                   For paragraph 926B(1)(c) of the Act, Part 7.6 of the Act applies in relation to a carbon unit, an Australian carbon credit unit or an eligible international emissions unit as if section 911A of the Act were modified by inserting after subsection 911A(5A) the following subsections:

'' Australian financial services licence in relation to carbon units, Australian carbon credit units or eligible international emissions units before and after 1 July 2012

          (5B)  Subsections (5C) to (5U) apply during the period that:

                     (a)  starts on 1 May 2012; and

                     (b)  ends on 31 December 2012, or a later day prescribed by the regulations.

          (5C)  A person must not provide a financial service in relation to a carbon unit, an Australian carbon credit unit or an eligible international emissions unit that is a financial product unless:

                     (a)  the person holds a licence authorising the person to provide the financial service; or

                     (b)  the person:

                              (i)  is registered to provide the financial service; and

                             (ii)  applies, no later than 31 October 2012, for a licence authorising the person to provide the service.

Civil penalty:          2,000 penalty units.

Note:          Carbon units, Australian carbon credit units and eligible international emissions units become financial products on 1 July 2012. The period mentioned in subsection (5B) relates to the registration process explained in subsection (5F) onwards.

          (5D)  A person commits an offence if:

                     (a)  the person is subject to a requirement under subsection (5C); and

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes the requirement.

Criminal penalty:    200 penalty units, or 2 years imprisonment, or both.

          (5E)  For the purposes of subsections (5C) and (5D), it is a defence if the person:

                     (a)  provides a financial service in relation to a carbon unit, an Australian carbon credit unit or an eligible international emissions unit; and

                     (b)  is exempted under this Act or the regulations from the operation of those subsections.

Note:          For the purposes of subsection (5E), a defendant bears an evidential burden in relation to the matter in subitem (3): see subsection 13.3(3) of the Criminal Code .

           (5F)  A person may apply to be registered by lodging an application with ASIC.

          (5G)  The application must be lodged during the period that:

                     (a)  starts on 1 May 2012; and

                     (b)  ends on 30 June 2012, or a later day prescribed by the regulations.

          (5H)  The application must be in the approved form.

           (5I)  ASIC must register a person (the registrant ) if (and must not register the registrant unless):

                     (a)  the application makes the statement set out in subsection (5J) in relation to each of the following persons:

                              (i)  the registrant;

                             (ii)  if the registrant is a body corporate--each director or secretary of the body corporate who would perform duties in relation to the financial services to be authorised by the registration or, if there is no director of that kind, each director or secretary of the body corporate;

                            (iii)  if the registrant is a partnership or the trustees of a trust--each partner or trustee who would perform duties in relation to the financial services to be authorised by the registration; and

                     (b)  ASIC is satisfied that:

                              (i)  the application is not false in a material particular and is not materially misleading; and

                             (ii)  no material matter has been omitted from the application.

           (5J)  For the purposes of paragraph (5I)(a), the statement is that:

                     (a)  a banning order or disqualification order under Division 8 of Part 7.6 of the Corporations Act 2001 is not in force against the person; and

                     (b)  if the person is or has been registered--the person's registration is neither suspended nor cancelled; and

                     (c)  an Australian financial services licence of the person is neither suspended, nor has been cancelled within the last 7 years, under:

                              (i)  paragraph 915B(1)(d) or subparagraph 915B(4)(b)(iii) (which deals with suspension or cancellation because of mental or physical incapacity); or

                             (ii)  section 915C (which deals with suspension or cancellation after offering a hearing); and

                     (d)  if the person is not the trustee of a trust--the person is not insolvent; and

                     (e)  if the person is a natural person:

                              (i)  the person is not disqualified from managing corporations under Part 2D.6; and

                             (ii)  the person has not been convicted, within 10 years before the application is made, of serious fraud; and

                      (f)  the person is of good fame and character within the meaning of section 913B.

          (5K)  A person who is registered under this section is registered on the basis that:

                     (a)  conditions on the registration may be imposed, varied or revoked under subsection (5L); and

                     (b)  the registration will be cancelled under subsection (5U); and

                     (c)  the registration may be cancelled, revoked, terminated or varied by or under later legislation; and

                     (d)  no compensation is payable if:

                              (i)  conditions on the registration are imposed, varied or revoked as referred to in paragraph (a); or

                             (ii)  the registration is cancelled, revoked, terminated or varied as referred to in paragraphs (b) and (c).

          (5L)  ASIC may, at any time:

                     (a)  impose conditions, or additional conditions, on a person's registration; and

                     (b)  vary or revoke conditions imposed on a person's registration.

         (5M)  ASIC may do so:

                     (a)  on its own initiative; or

                     (b)  if the registered person lodges an application with ASIC for the imposition, variation or revocation.

          (5N)  ASIC must give the registered person written notice of the imposition, variation or revocation of the conditions. The imposition, variation or revocation of the conditions comes into force on the day specified in the notice, which must not be before the day on which the decision to impose, vary or revoke the conditions was made.

          (5O)  Despite subsection (5L), ASIC may only impose conditions or additional conditions, or vary or revoke the conditions, on the registration after giving the registered person an opportunity:

                     (a)  to appear, or be represented, at a hearing before ASIC that takes place in private; and

                     (b)  to make submissions to ASIC in relation to the conditions.

This subsection does not apply to ASIC imposing conditions when a person becomes registered.

           (5P)  ASIC must ensure that the registration is subject to a condition that specifies the financial services or classes of financial services that the registered person is authorised to provide in relation to a carbon unit, an Australian carbon credit unit or an eligible international emissions unit.

          (5Q)  The registration is subject to such other conditions as are prescribed by the regulations. However, ASIC cannot vary or revoke those conditions.

          (5R)  If, after 1 July 2012, a registered person provides a financial service to a retail client in relation to a carbon unit, an Australian carbon credit unit or an eligible international emissions unit, the person must:

                     (a)  be a member of an approved external dispute resolution scheme; and

                     (b)  ensure that the person has in place compensation arrangements within the meaning of section 912B.

           (5S)  A registered person must:

                     (a)  do all things necessary to ensure that the financial services provided in relation to a carbon unit, an Australian carbon credit unit or an eligible international emissions unit by the registration are engaged in efficiently, honestly and fairly; and

                     (b)  comply with the conditions on the registration; and

                     (c)  comply with the financial services laws; and

                     (d)  take reasonable steps to ensure that its representatives comply with this Act and the regulations; and

                     (e)  take reasonable steps to ensure that clients of the registered person are not disadvantaged by any conflict of interest that arises wholly or partly in relation to financial services provided in relation to a carbon unit, an Australian carbon credit unit or an eligible international emissions unit by the registered person or its representatives; and

                      (f)  comply with any other obligations that are prescribed by the regulations.

          (5T)  For the purposes of this section:

                     (a)  ASIC may suspend or cancel the registration of a registered person:

                              (i)  on its own initiative; or

                             (ii)  if the registered person lodges an application with ASIC for the suspension or cancellation; and

                     (b)  a suspended registration has no effect while it remains suspended; and

                     (c)  ASIC may at any time revoke the suspension of a registered person's registration; and

                     (d)  ASIC must exercise its powers under this subsection in a manner that is consistent, as far as practicable, with the manner in which it must exercise its powers to suspend or cancel registrations under Division 4 of Part 3 of Schedule 2 to the National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009 .

          (5U)  The registration of every registered person is cancelled at the end of 31 December 2012, or a later day prescribed by the regulations.

Note:          After 31 December 2012, a person who has been registered but does not hold a licence authorising the person to provide financial services in relation to a carbon unit, an Australian carbon credit unit or an eligible international emissions unit will be required to cease providing the financial services.''.



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