*
*
*

PKF Australia

Accountants and Business Advisers

ASIC Releases Proposed Industry Funding Fees

who to contact

Cameron Bradley

Partner

view profile

ASIC Releases Proposed Industry Funding Fees

After much anticipation and speculation, the Australian Securities and Investments Commission (ASIC) has released their Summary of 2017-2018 levies.

Background

In 2017, the Federal Government passed laws whereby ASIC will recover most of its regulatory costs via levies from the industries that it regulates. The 2017-18 financial year is the first year that the ‘Industry Funding Model’ will operate, with invoices expected to be sent to affected parties in January 2019.  

What industries are subject to levies?

Essentially, any industry that falls under oversight of ASIC will be subject to extra fees from ASIC. These include:

  • Companies
  • Deposit-taking and credit providers
  • Investment management
  • Superannuation and related services
  • Market infrastructure
  • Market intermediaries
  • Financial advisory
  • Insurance

If your entity is a registered charity under the Australian Charities and Not-for-profits Commission (ACNC) then you will not be subject to a levy from ASIC.

What do industries need to do?

If your organisation is regulated by ASIC, you must register and maintain contact details on the ASIC Regulatory Portal. You may also be required to submit business activity metrics via the portal between July and September each year.

ASIC will use this information each year to calculate each entity’s share of the regulatory costs for the sectors in which they operate. The first collection of information occurred in 2018.

Unlike the self-assessment process for income tax returns, ASIC will calculate the levy and issue invoices in January each year.

How are levies calculated?

Levies issued by ASIC may be either a flat levy or graduated levy, depending on the type of entity within each industry. Of particular interest is that ASIC will calculate the levies by applying a sliding scale to many entities. Fees will vary depending upon the metric used as the base for the calculation, depending on which industry sector the entity is in. For example, listed companies will pay a base fee plus a levy based on market capitalisation and financial advisory firms will pay a base fee plus a levy for each adviser.

ASIC has indicated that “a robust model” was used in determining the basis for each levy, but it remains to be seen what the feedback will be once the actual invoices are received.

The Summary of 2017-18 levies can be viewed on the ASIC website.

Other costs

In addition to the extra levies to cover regulatory costs, ASIC has extended the user pays dictum by boosting fees to cover their compliance costs. There has been a substantial increase in fees that are applicable for forms lodged with ASIC that involve some form of decision by ASIC. For example, the fee to request approval for the resignation of an auditor of a public company by ASIC (Form 342) has increased from $34 to $3,487. This measure has been met with negativity to date, particularly for small unlisted public companies without significant resources to cover these costs. It also unwinds, to an extent, the positive measures ASIC implemented three years ago to reduce the red tape associated with the resignation process through allowing resignations to occur outside of a company’s annual general meeting. Accordingly, the accounting industry has passed on this feedback to ASIC.

Should you have any questions about ASIC’s new funding model please contact your local PKF office.


Comments

Get in touch

For more information on how our services can help your business get in touch.

* *
*