FAQs: ASIC industry funding

What regulatory activities will industry fund?

Most of ASIC's regulatory costs will be recovered from industry. These activities are outlined in our Cost Recovery Implementation Statement (CRIS) published each year, and include supervision and surveillance, enforcement, industry engagement, education, guidance and policy advice.

How much will regulated entities pay and when?

The costs and levies payable by industry sectors to recover ASIC’s regulatory costs are summarised each year in December: see Regulatory costs and levies.

We issue levy notices to individuals and entities to recover these costs between January and March each year. Payment is due 30 business days after the notice is issued.

What is a flat levy?

A flat levy means the total cost of regulating a subsector is shared equally among the entities authorised to operate in that subsector. A flat levy is calculated by dividing ASIC's regulatory costs for a subsector between the number of entities in that subsector.

What is a graduated levy?

In some subsectors, an entity's size or level of business activity will increase the level of risk and regulatory effort required by ASIC. Therefore, each entity is charged a variable component specific to that entity.

A graduated levy is calculated by dividing ASIC's regulatory costs for a subsector between entities based on the metric used for that subsector. It is made up of a minimum levy and a variable component:

• The minimum levy is an estimate of our direct and indirect costs of undertaking stakeholder engagement, policy advice, guidance, education and a portion of our capital expenditure allowance.
• The variable component is driven by our enforcement and surveillance activities for each subsector. The cost to undertake these regulatory activities varies significantly. The conduct of industry participants influences our risk assessment of the subsector and the level of regulatory oversight required.

All entities in the subsector must pay the minimum levy and the additional variable component, based on their share of the activity within the subsector.

Are the levies tax deductible?

Yes. The levies are tax deductible. This is consistent with the approach for other Government cost recovery models, such as APRA’s Financial Institution Supervisory Levy.

Are levies subject to GST?

No. The levies are not subject to GST.

How does ASIC allocate its funding?

Our funding is allocated based on our strategic priorities and focus areas. You can read about our strategic priorities and focus areas in our Corporate Plan. For progress and achievements, see our annual report.

Our enforcement priorities communicate our intent to industry and indicate where we will direct our resources and expertise.

Why didn't I receive my levy notice online?

If you have received a levy notice by mail rather than online, you may not have registered an ASIC Regulatory Portal account. To receive updates online, register on ASIC Regulatory Portal.

Why have I received a levy notice for a 'large proprietary company' flat levy?

In July each year, ASIC contacts entities that we think could be large proprietary companies. Directors are required to register contact details on the ASIC Regulatory Portal and where relevant, submit or confirm business activity metrics.

During this process, you are given the opportunity to opt-out of the sector by confirming that the entity was not a large proprietary company at any time during the relevant financial year.

If you fail to meet this reporting obligation, we will issue a levy notice on the assumption that you are a large proprietary companies.

Find out if you are a large or small proprietary company.

I didn’t know I had industry funding obligations. Am I still required to pay my levy?

All entities regulated by ASIC must pay their levy notice by the due date.

In July, we contact each industry funding stakeholder with detailed instructions on what they need to do each year.

If you fail to meet this reporting obligation, we use the data available to calculate your share of the regulatory costs for the sector in which you are authorised to operate.

What happens if I changed the type of my company part way through the financial year?

In this case, your industry funding levy notice will contain levies for two subsectors. For example, the levy notice for an unlisted public company that was changed to a large proprietary company will have levies for both of these subsectors.

Why have I received a levy notice when I cancelled or varied my licence during the financial year?

Industry funding levies are payable by all entities authorised to operate in a subsector in any given financial year – irrespective of the duration the licence was held for that year.

I am a charity. Why have I received a levy notice?

Entities that are registered with the Australian Charities and Not-for-profits Commission (ACNC) on 30 June each year are exempt from ASIC's industry funding levy for the relevant financial year.

If you received a levy notice for a company that acted solely as the trustee of a charity registered with the ACNC, you can ask ASIC to waive this levy.

You will have to attach a statutory declaration signed by a company director or secretary stating that the company undertook no other activities during the relevant financial year other than as trustee of a charity registered with the ACNC.

See Details on how to apply for an industry funding levy waiver.

I have received an email notification from ASIC that an industry funding levy notice is ready to view online. How do I view the levy notice?

If you have an ASIC Regulatory Portal account, you can log into your portal account to view your industry funding levy notice and pay the levy online.

If you need help with signing into your account – including connecting to an entity – see ASIC Regulatory Portal access.

How will you calculate my levy notice if I did not submit business activity metrics?

If you do not meet your reporting obligation, we will use the data available to calculate your share of the regulatory costs for the sectors in which you are authorised to operate.

What are my obligations as a small proprietary company?

In most cases, small proprietary companies do not have specific obligations relating to industry funding. We collect the regulatory costs for small proprietary companies through a component of the annual review fee.

If you are a small proprietary limited company that falls into an industry funding subsector, you will have to pay industry funding levies. You may also need to submit business activity metrics in the ASIC Regulatory Portal.

What are my obligations as a large proprietary company?

Large proprietary companies will also pay a component in the annual review fee to cover regulatory costs. This will be offset against the levy you are required to pay when your levy notice is calculated.

I am a securities dealer. How is my business activity metric calculated?

Under the ASIC Market Integrity Rules (Securities Markets) 2017, market participants must provide regulatory data to a market operator in an order transmitted to an order book of that market operator. Market participants must also provide this data on a trade report made to a market operator.

The regulatory data includes an ‘intermediary ID’. The Australian financial services (AFS) licensee provides their AFS licence number as the intermediary ID for each side of the order or transaction (buy and/or sell) if:

• the AFS licensee is an automated order processing (AOP) client of the market participant, and
• the market participant has an arrangement with the AFS licensee under which the AFS licensee submits trading messages into the market participant’s system as intermediary for its own clients.

The regulatory data provided by market participants to market operators is then provided to ASIC for the purpose of market supervision.

We also determine the volume of trading by each AFS licensee using intermediary ID data.

You should contact the market participants of which you are an AOP client if you need to confirm the volume of trading reported to ASIC.

Do credit representatives, financial advisers and authorised representatives have to register and submit industry funding metrics?

Only licensees (not their representatives) are required to submit metrics in respect of credit and financial services related activities. Some representatives may be required to submit information in their capacity as a public company, a large proprietary company, a registered company auditor, registered liquidator or as a market intermediary. 'Regulated entities' are defined under the ASIC Supervisory Cost Recovery Levy Act 2017.