The federal government has started its review of the industry funding model (IFM) applied to the Australian Securities and Investments Commission (ASIC), which will be led by Treasury with input from the regulator, other government departments and the public.
Treasury announced the commencement of the review via an update on its website and the release of the terms of reference to guide the review, saying it “will be forward looking and focused on identifying refinements to the IFM that may be required to ensure its settings remain appropriate”.
“The review will be led by Treasury in consultation with ASIC, the Department of Finance and the Department of the Prime Minister and Cabinet,” it said.
“Treasury will undertake a public consultation process later in the year which will provide an opportunity for stakeholders to provide input into the review.”
The terms of the review stated it would consider issues and, where appropriate, make recommendations “regarding the types of costs and the nature of ASIC’s activities that are recovered from industry, how those costs are recovered and who they are recovered from”.
Additionally, the review would consider how the corporate regulator allocates costs to sub‑sectors and changes in levy amounts since the commencement of the funding model, with a focus on sub‑sectors that have seen large increases in levies.
It would also consider if the current funding model is still appropriate following structural changes in parts of the financial services industry and if changes should be applied to any levy metrics.
The terms of reference added the review would not assess the role and regulatory oversight of ASIC, nor its performance and how it allocates resources to deliver on its mandate as a regulator.
The funding model has been an area of concern for the financial advice sector due to sharp, ongoing rises in the levies placed on advisers and licensees, leading to calls for a reduction in the levies.
The previous government announced in August 2021 the ASIC levy for financial advisers for the 2021 and 2022 financial years would be rolled back to the 2018/19 rate of $1142 per adviser rather than increase to $3138 per adviser, and it would undertake a review of the funding model to ensure it is fit for purpose.
