ASIC releases industry funding estimates

The Australian Securities and Investments Commission (ASIC) has published its cost recovery implementation statement (CRIS), outlining the regulator’s forecast for costs and activities for the 2017/18 financial year.

The CRIS: Levies for ASIC industry funding 2017/18 revealed the industry funding model, which will recover the actual costs ASIC expends during each financial year to undertake its regulatory activities, will cost $246.4 million.

This amount includes operating expenditure plus a capital expenditure allowance.

ASIC will issue notices to entities setting out the amount of levy due.

The figures in the CRIS reflect the regulator’s budgeted resource allocation and are to be used on an indicative basis only.

In March 2018, the regulator expects to publish indicative levies where possible for each subsector for the 2017/18 financial year. However this will only be possible where ASIC can assess the industry metrics that are to be used to allocate costs.

Speaking to selfmanagedsuper about the funding model in June, SMSF Association chief executive John Maroney said it was important to have a well-funded regulator to help boost consumer confidence and ensure the financial services industry was sustainable.

“So having a properly funded ASIC, and other regulators, are an important part of that and we accept it’s appropriate the funding comes from those that are being regulated, as a general principle,” Maroney said at the time.

He added that while the funding model has been broadly supported by the SMSF Association, he warned it was imperative to ensure the levies charged were not burdensome to advisers or detrimental to the provision of advice.

In addition, Maroney believes sectors of the financial services industry that prove to have a low level of compliance issues should be given discounts when it comes to the funding model for ASIC.

“We’ve previously suggested that there should be discounts for those licensees and sectors that are performing well with low levels of complaints,” he said.

On 15 June, the ASIC Supervisory Cost Recovery Levy Bill 2017 and related bills received passage through the Senate.

Effective from 1 July, the corporate watchdog’s regulatory costs will be recovered from all industry sectors regulated by ASIC through annual levies.

Finance Minister Mathias Cormann said the industry funding model was a critical component of the federal government’s plan to improve consumer outcomes in the financial services sector.

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