The cost recovery framework for the Australian Securities & Investments Commission (ASIC) will see regulated entities share the costs of ASIC’s regulatory services for their sector.
The framework, outlined in a report released today, identifies industry sectors and provides a methodology for how the levies will be calculated.
According to ASIC, the first invoices will be issued in January 2019 and will recover costs for regulatory services for the 2017/18 financial year.
Levies will also include a clawback of prior year market supervision expenditure that remains unrecovered as at 30 June 2017:
The report confirms that credit providers (other than small amount credit providers) will be subject to a minimum levy of $2,000, with a graduated charge for every $10,000 of credit providers for amounts over $100 million.
Small amount credit providers will not be subject to a minimum levy.
Credit intermediaries will be subject to a minimum levy of $1,000 and a graduated levy will be charged depending on the number of authorised representatives the intermediary has at 30 June.
Those in the financial advice sector will be subject to a fixed levy of $1,500, with a graduated levy calculated on the number of advisers on the Financial Adviser Register. However, for securities dealers, large securities exchange participants and large futures exchange participants the graduated component will exclude advisers who only provide advice on quoted products, products traded on a foreign financial market or basic banking products
Notably, the report also states that insurance product issuers now includes AFS licensees who make offers to arrange for the issue of insurance products under an intermediary authorisation with an APRA-regulated insurer that does not hold an AFS licence.
These product distributors will be subject to a flat levy.
For insurance product providers, there will be a minimum levy of $20,000 with a graduated levy after $5 million.
ASIC will release the estimated costs for each subsector's leviable activities for the 2017/18 financial year in the Cost Recovery Implementation Statement in October 2017.
ASIC chairman Greg Medcraft commented today: “We are pleased to be able to confirm the framework to help industry prepare for this new regime and thank industry members for their contribution.
“ASIC will continue to support industry to comply with their obligations as they become due. Further details will be provided in a Cost Recovery Implementation Statement later this year.”
[Related: ASIC industry funding model passes Senate]
Annie Kane is the editor of Mortgage Business.
As well as writing news and features on the Australian mortgage market, financial regulation, fintechs and the wider lending market – Annie is also a regular contributor to the Mortgage Business Uncut podcast.
Before joining Momentum Media in 2016, Annie wrote for a range of business and consumer titles, including The Guardian (Australia), BBC Music Magazine, Elle (Australia), BBC Countryfile, BBC Homes & Antiques, and Resource magazine.