ASIC industry funding

The Government has introduced new laws that change the way ASIC is funded. Under the new arrangements, regulated entities will receive an invoice for ASIC’s regulatory services delivered in the prior year.

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How does industry funding work?

Regulated entities have been categorised into 48 subsectors across all corporate entities subject to the Corporations Act, auditors, insolvency practitioners, credit licensees, Australian Financial Service licensees and other regulated entities and individuals.

ASIC's regulatory costs will be allocated among these subsectors through either a flat levy or a graduated levy.

The industry funding model will recover the actual amount spent during the previous financial year. Therefore the levies can only be calculated and issued in the following financial year.

How will levies be calculated?

Some entities will pay a flat levy, with the cost of regulating a subsector shared equally among the entities operating in that subsector.

Other entities will pay a graduated levy, with the entity's size or level of business activity determining their share of costs.

The detailed methodology for how we will calculate levies for each industry sector is outlined in Report 535 ASIC cost recovery arrangements: 2017–18.

A new obligation for ASIC's regulated population

During July, we will send letters to each regulated company’s registered office address with instructions on how to log on to the new Regulatory portal and a unique industry funding security key. The security key is a number uniquely associated with a regulated entity enabling the company to submit business activity metrics within the Regulatory Portal.

Between July and September each year, regulated entities will provide ASIC with their business activity metrics for the previous financial year. The first collection will occur in July to September 2018. The deadline for business activity metrics to be provided via ASIC’s new Regulatory Portal is 27 September 2018.

Note: Only company directors or secretaries can perform initial entity registration in the ASIC Regulatory Portal. Once the director or secretary have registered they can then invite a trusted representative such as a company employee, a compliance officer, or a registered agent to the portal to connect to their entity and assign the them required user access to view confidential information and perform regulatory tasks on behalf of the entity

The director/secretary will only ever have to register and assign access to the trusted representative or registered agent, once for their entity.

The trusted representative will then receive an invitation to the portal for the relevant entity and will be able to perform the required duties on behalf of the entity which they represent, including for example, the submission of industry funding business activity metrics.

For those required to pay a flat levy only, the information you provide will confirm which subsector you have been operating in. This will allow us to divide our costs with the final number of entities operating in your subsector.

For those paying a graduated levy, the information you provide will confirm your entity's 'share' of the leviable activities in your subsector and will determine your final invoice amount.

It is important that you have the systems in place to capture this information.

Each year in January you will receive an invoice via the Regulatory Portal. The first invoices will be issued in January 2019.

Small proprietary companies

ASIC’s regulatory costs for small proprietary companies will be collected through a $4 increase to their Annual Review Fee, which will take effect from 1 July 2018. This simple fee increase minimises the reporting burden on small proprietary companies.

Individuals acting on behalf of the entity

Only company directors or secretaries can perform initial entity registration in the ASIC Regulatory Portal. Once the director or secretary have registered they can then invite a trusted representative such as a company employee, a compliance officer, or a registered agent to the portal to connect to their entity and assign the them required user access to view confidential information and perform regulatory tasks on behalf of the entity.

The director/secretary will only ever have to register and assign access to the trusted representative or registered agent, once for their entity.

The trusted representative or registered agent, will then receive an invitation to the portal for the relevant entity and will be able to perform the required duties on behalf of the entity which they represent, including for example, the submission of industry funding business activity metrics.

What are ASIC's costs?

The cost of ASIC's work in each subsector is forecast in ASIC's annual Cost Recovery Implementation Statement – or CRIS.  The CRIS is a document that ASIC will publish each year which will set out the expected expenditure on its regulatory activities. The CRIS is a key part of ASIC's accountability to Government and industry around the transparency of our costs.

Can I use the figures in the CRIS to estimate my invoice for the 2017-18 financial year?

The figures in the CRIS reflect ASIC's budgeted resource allocation. They should be used on an indicative basis only.  

Where possible, ASIC will publish the indicative levies in advance for each subsector. For the 2017-18 financial year, this will only be possible where ASIC can access the business activity metrics that are used to allocate costs for that subsector. At this stage, we expect this information to be available for around 80% of leviable entities in the regulated population.

Fees for service

The Government passed legislation in accordance with the Cost Recovery Implementation Statement (CRIS) – Fees for Service on 28 June, with new pricing taking effect 4 July 2018.  ASIC charges these fees when doing work for licensing and professional registrations, applications for relief and reviews of corporate finance transaction documents.

Background

Industry funding will allow ASIC to better focus its resources on the sectors that are creating the need for most regulation.

In response to the recommendations of the Financial System Inquiry, the Government began consulting with affected industries on the operation of the industry funding model in April 2016. The regime commenced on 1 July 2017.

Industry funding provides industry with a strong incentive to self-regulate because if the wrong thing is done, we will intervene, and increase the costs charged to that sector. 

It also strengthens ASIC's accountability to, and relationship with, industry because the cost of what we do will be more transparent

Industry funding legislation was passed on 15 June 2017. Regulations were finalised on 27 June 2017, and the new regime took effect on 1 July 2017.

Key dates

2018

March 2018: ASIC publishes indicative levies for FY17-18 for approx. 80 per cent of regulated entities based on FY17-18 budget data.

June 2018: ASIC intends to publish indicative levies for FY18-19 for approx. 80 per cent of regulated entities based on FY18-19 budget data.

1 July 2018: Annual Review Fees increase by approximately $4 for all proprietary companies.

4 July 2018: New fee-for-service charges commence.

July – Sept 2018: Regulated Entities submit a return about their operations for FY17-18.

October 2018: Budget FY18-19 leviable costs by subsector published in Cost Recovery Implementation Statement (CRIS)

2019

January 2019: ASIC will issue its first levy invoices to industry for FY17-18.

February 2019: Entities must pay their levy invoice or face interest penalties.

March 2019 onwards: ASIC will start pursuing late payments.

Last updated: 16/07/2018 09:55