What is industry funding?

The Government’s industry funding arrangements for ASIC became law in 2017.  

This is the first year of the new regime where ASIC will recover its regulatory costs from the industries we regulate.

Industry funding was a key recommendation in the 2014 Murray Financial System Inquiry.

Developing the model was a substantial undertaking with a high level of robust engagement from industry sectors throughout the Government’s consultation process.

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

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 in October 2017, and include stakeholder engagement, education, guidance, surveillance, enforcement, and policy advice.

Why has the Government decided on an 'industry pays' approach?

An 'industry pays' model means that the funding of regulatory activities undertaken by ASIC is met by those creating the need for regulation, rather than the Australian taxpayer.

How much will regulated entities pay and when?

The levies payable by industry sectors to recover ASIC’s FY 2017-18 regulatory costs have been summarised. Invoices to individuals and entities to recover these costs were
issued in January 2019. They are
due for payment March 2019.
 

Key points

• The amounts shown are the levies payable by each industry subsector.
• Individual entities can calculate their specific invoice amount from the information found in the summary.
• Invoices were issued in 2019.
• Detailed information about how ASIC calculates levies is available in the ASIC cost recovery regulations.  

Detailed information about how ASIC calculates levies is available in the ASIC cost recovery regulations.

What is a flat levy?

A flat levy shares the total cost of regulating a subsector equally among the entities operating in that subsector. A flat levy will be 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 drive the level of risk and regulatory effort required from ASIC and therefore the levy charged. A graduated levy will be calculated by dividing ASIC's regulatory costs for a subsector between entities based on the relevant metric and can be made up of (i) a minimum levy and (ii) a variable levy 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. Our remaining regulatory costs for the subsector will be recovered through the variable component of the levy.
• The variable component of the graduated levy is driven by our enforcement and surveillance activities for each subsector. The cost to undertake these regulatory activities varies significantly—the conduct and behaviour of industry participants influences our resulting risk assessment of the subsector and the level of regulatory oversight required.

Under the graduated levy component formula, all entities in the subsector must pay (i) the minimum levy, and (ii) the additional variable component, based on each entity's share of relevant activity within the subsector.

What if my entity falls into more than one subsector?

If an entity holds more than one licence or registration, the levy relevant for each subsector is payable. For example, if an entity is both a super trustee and a listed company, both levies will be payable and their invoices will reflect this.

What subsector is my entity in? (PDF 470 KB)

What new obligations do regulated entities have?

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 occurred in 2018.

For more information on your obligations each year, see ‘Your business activity metrics and the ASIC Regulatory Portal’

Note: If the entity is a small proprietary limited company and does not fall into one of the other subsectors then they will only pay a small increase in their Annual Review Fee. However, if they are a small proprietary company that is also part of one of our other regulated populations, the company will also be required to submit contact details and business activity metrics in the portal.

The ASIC website contains a definition of a small proprietary company.

Will the levies be tax deductible?

Yes. The levies will be 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 Corporate Plan has information on ASIC’s strategic priorities and focus for the next four years. The latest plan was published in August 2018. The ASIC Annual Report outlines what we have achieved each year

The Cost Recovery Implementation Statement (CRIS) outlines ASIC's forecasted regulatory costs and activities by subsector for each financial year and provides details on how ASIC allocated its costs in the previous year. The CRIS will also provide industry with indicative levies for the following year to help them plan.

Can I use the figures in the CRIS to estimate my levy invoice for next year?

Industry can use the data in the CRIS to estimate their levy invoice. Detailed information about how ASIC calculates levies is available in the ASIC cost recovery regulations. Indicative levies remain an estimate and the amounts are likely to change when ASIC’s actual regulatory costs are known in December each year.

When will ASIC publish actual levies?
ASIC will publish a summary of its final regulatory costs from the previous financial year each December.

Will ASIC funding change because of industry funding?

ASIC's budget will continue to be determined by the Government as part of its Federal Budget process.

How are ASIC’s costs shared among the regulated population?

Regulated entities have been categorised into 48 subsectors across corporations, auditors, insolvency practitioners, credit licensees, AFS licensees and other regulated entities and individuals.

Attributing the expected costs across each subsector is done by assessing the regulatory effort required to support ASIC's vision and address the key risks set out in the Corporate Plan.

The budgeted cost of ASIC's work in each subsector is outlined in our annual Cost Recovery Implementation Statement (CRIS) to be published to ASIC's website each year.

How will existing cost recovery arrangements be affected?

The Market Supervision Cost Recovery regime ceased on 30 June 2017 and has been incorporated into the broader ASIC industry funding model from 2017-18 onwards.

What are fees for service?

While around 90% of ASIC's regulatory activities will be recovered through industry funding arrangements, the remaining 10% will be recovered via fees for service.

Fees for service recover the regulatory costs attributable to a single, identifiable entity. They will apply to:

• licensing and professional registration services
• processing of relief applications, and
• ASIC's formal compliance review of documents lodged by entities under the Corporations Act 2001.

New fees for service pricing take effect from 4 July 2018. Additional detail can be found in the Cost Recovery Implementation Statement (CRIS) - Fees for service.

When is my invoice due?

Industry funding invoices were due for payment by 15 March 2019.

How do I pay my invoice?

The payment options outlined on your invoice include BPAY and Electronic Funds Transfer.

BPAY

Use the BPAY details provided on your invoice to pay using BPAY. You must ensure the BPAY reference number is correct. The BPAY reference number will begin with the digits ‘309’.

Ensure you allow three business days for electronic processing.

Electronic Funds Transfer

Use the Electronic Funds Transfer details provided on your invoice to transfer directly from your financial institution. You must ensure the Electronic Funds Transfer reference number is correct. The Electronic Funds Transfer reference number will begin with the digits ‘309’.

Credit card

The credit card payment option using the ASIC Regulatory Portal is only available if you received your invoice online. Portal account holders can log in to their portal account to view their industry funding invoice and make a payment online.

How did ASIC calculate the levy amount shown on my invoice?

Your invoice contains details explaining how your levy was calculated. The detailed information about how we calculate industry funding levies is outlined in the ASIC cost recovery regulations.

What happens if I don't pay?

There are penalties for late payment of industry funding levies, which are calculated and charged for each month after the payment deadline. The late payment penalty is calculated as 20% per annum of the overdue levy amount.

For example, if the overdue amount is $391, a late payment penalty of $6.52 will be added each month to the total amount payable ($391 x 20% / 12 months = $6.52 per month).

Penalties apply from 1 April 2019.

Should the outstanding balance remain unpaid, ASIC may deregister the entity.

Can I apply for a levy waiver or penalty waiver?

We will only consider waiving a levy or penalty in exceptional circumstances when there were issues beyond the control of all representatives of the entity. How to apply for an industry funding levy or penalty waiver.

What happens if I have overpaid?

You can request a refund if you have accidently overpaid. We will provide a refund in the same way you made payment. Details on industry funding refunds.

Can I apply for a payment plan?

In some cases, we can arrange a payment plan that allows you to make industry funding payments in instalments.

Details on how to apply for a payment plan.

Why is my levy amount different from the estimate I calculated?

The levies payable by industry sectors to recover ASIC’s FY 2017-18 regulatory costs were summarised in December 2018. The amounts published in December 2018 were rounded up to two decimal points.

Entities were able to estimate their levy amount based on this information.

The actual levy amount outlined on each invoice was calculated on a value up to 10 decimal points.

Detailed information about how ASIC calculates levies is available in the ASIC cost recovery regulations.

Example: for the listed corporations subsector, the December 2018 summary states $0.30 per $10,000 of market capitalisation above $5m. The actual calculation of the levy has been calculated based on $0.3007334408 per $10,000 of market capitalisation above $5m.

ASIC cost recovery regulations.

ASIC industry funding summary of 2017‒18 levies (PDF 687 KB)

 

Why didn't I receive my invoice online?

If you have received an invoice via mail (rather than online) it means that you may not have registered an ASIC Regulatory Portal account to confirm or submit relevant information to ASIC. In these cases, ASIC has used the data available to calculate each entity’s share of the regulatory costs for the sector(s) in which it operates.

Your invoice contains details explaining how your levy was calculated. The detailed information about how we calculate industry funding levies is outlined in the ASIC cost recovery regulations.

All entities regulated by ASIC must pay their levy invoice by 15 March 2019.

Why have I received an invoice for a ‘large proprietary company’ flat levy?

All entities regulated by ASIC must pay their levy invoice by 15 March 2019. 

In July 2018 ASIC wrote to the directors of proprietary companies that we considered could be large. Other communications were undertaken to inform ASIC’s regulated population of their new industry funding obligations. 

Directors were required to register contact details on the ASIC Regulatory Portal and where relevant, submit or confirm business activity metrics by the 27 September 2018 deadline.  

During this process the entity was given the opportunity to ‘opt-out’ of the sector by confirming whether or not the entity was a large proprietary company at any time during the 2017-18 financial year. 

If directors failed to meet this reporting obligation, ASIC has issued invoices on the basis that these companies are large proprietary companies.

Definition of a small proprietary company.

Definition of a large 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 invoice by 15 March 2019.

In July 2018, ASIC wrote to the address registered with ASIC of each industry funding stakeholder with detailed instructions on how to meet their obligations.

For those that failed to meet this reporting obligation, ASIC has used the data available to calculate the entity’s share of the regulatory costs for the sector in which it operates.

The Government’s industry funding arrangements for ASIC became law in 2017.

What happens if I changed the type of my company part way through FY 2017-18?

In these cases, your industry funding invoice will contain levies for two subsectors. Example: the invoice 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 an invoice when I cancelled or varied my license in FY 2017-18?

Industry funding levies are payable by all entities operating in a subsector in any given financial year - irrespective of the duration the license was held for that year.

I am a charity. Why have I received an invoice?

Entities that are registered with the Australian Charities and Not-for-profits Commission (ACNC) as at 30 June 2018 are exempt from ASIC’s 2017-18 industry funding levy.

If you received a levy invoice for a company that acted solely as the trustee of a charity registered with the ACNC, you may request ASIC waive this levy.

We will require you 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.

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

I have received an email notification from ASIC that an industry funding invoice is ready to view online, how do I view the invoice?

ASIC Regulatory Portal account holders can log into their portal account to view their industry funding invoice and make a payment online. The page has information on what to do if you have forgotten your password.

If you are not a registered portal user, you need to be invited to connect to the entity by the senior administrator of the portal account before you can log in and view the invoice. 

What the senior administrator of the portal account needs to do

If the alternative email address nominated is
not owned by you – follow these steps if you would like them to be able to view
the invoice. Follow these steps for each of your entities as required.

1. Log in to your portal account.
2. Select your entity.
3. Click on ‘Administration’ in the banner and select ‘Entity Contacts’.
4. Make a note of the alternate email address you nominated to receive your industry funding levy invoice.
5. Select the ‘Users’ tab.
6. Select ‘Invite new user to entity' and insert the alternate email address noted in step 4.
7. Allocate their Access level.

We will send an invitation key to your billing contact. Note: This invitation key will be valid for 48 hours.

What the alternate email address nominated to receive the industry funding levy invoice needs to do

1. Click on the link in the email received from ASIC.
2. Register for portal access by selecting the “I want to accept an invitation from a portal user” tile.
3. Enter the invitation key (which was sent to their email address) and other details to complete the registration process.

Note: The invitation key will be valid for 48 hours.

A detailed guide on the invitation process is available.

Where can I find out more information about industry funding?

More details information about industry funding can be found in our FAQ section.

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 occurred in 2018.

• Business activity metric checklist (PDF 280 KB)
• What subsector is my entity in? (PDF 160 KB)
• Video: How to submit industry funding business activity metrics in the portal

The business activity metrics used to calculate levies are readily available measures of business activity such as:

• revenue generated
• total assets
• credit provided
• deposits held
• number of new and ongoing appointments (registered liquidators).

If you miss the deadline and do not submit your business activity metrics, you are still encouraged to register an ASIC Regulatory Portal account for future correspondence with ASIC.

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.

What do I do if I have missed the deadline and did not submit business activity metrics?

If you have missed the deadline and have not submitted your business activity metrics, you are still encouraged to register an ASIC Regulatory Portal account for future correspondence with ASIC.

The penalties in the legislation can apply if someone has not submitted metrics without a “reasonable excuse”. For those who believe they have a reasonable excuse they need to provide evidence by contacting us online. Ensure you select "Company" and then "Industry Funding" so the inquiry is sent to the correct team quickly. Please attach any documentary evidence.

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

There are a range of steps that ASIC will take to calculate invoices for entities that did not submit business activity metrics.

The first industry funding invoices will be issued in early 2019.

How will small proprietary companies be impacted?

In most cases, small proprietary companies do not have specific obligations relating to industry funding. ASIC will collect the associated regulatory costs for small proprietary companies through a small increase to their Annual Review Fee.

Note: Industry funding levies apply if the entity is a small proprietary limited company that falls into an industry funding subsector. The company may also be required to submit business activity metrics in the portal.

How will large proprietary companies be impacted?

Large proprietary companies will also pay a small increase in their Annual Review Fee. This will be offset against the levy they are required to pay when their invoice is calculated.

• Definition of a small proprietary company.
• Definition of a large proprietary company.

Registered charities

Charities registered with the Australian Charities and Not-for-profits Commission (ACNC) at 30 June each year are excluded from industry funding obligations and should not receive an invoice from ASIC. If you do receive an industry funding invoice please contact us and we will investigate why.

Individuals acting on behalf of the entity in the portal

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

I am a securities dealer, how is my business activity metric calculated?

The ASIC Market Integrity Rules (Securities Markets) 2017 require market participants to 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.

Regulatory data includes, amongst other things, the “intermediary ID”. The Australian Financial Services Licence (AFSL) number of an AFSL holder is provided as the intermediary ID for each side (buy and/or sell) of the order or transaction where:

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

Regulatory data provided by market participants to market operators is subsequently provided to ASIC for the purpose of market supervision.

ASIC also determines the volume of trading by each AFSL holder by using intermediary ID data.

You should contact the market participant(s) of which you are an AOP client if you require confirmation of the volume of trading reported to ASIC.

Are credit representatives, financial advisers and authorised representatives required 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.

2018-19 reporting deadline

The due date for submitting or reviewing your 2018-19 business activity metrics is 26 September 2019. Refer to the attached instrument for details.

Industry funding timeline

2015-2017	Industry consultation
June 2017	The ASIC Supervisory Cost Recovery Levy Regulations were made on 27 June 2017. The ASIC Supervisory Cost Recovery Levy Bill 2017 passed both Houses on 15 June 2017
July 2017	Industry funding legislation took effect
October 2017	Budget FY17-18 leviable costs by subsector published in the Cost Recovery Implementation Statement (CRIS) for consultation with industry
March 2018	ASIC published indicative industry funding levies for FY17-18 (for approximately 80% of regulated entities based on FY17-18 budget cost data)
July 2018	Annual Review Fees increased by $4 for all proprietary companies
July–September 2018	Regulated entities required to submit information about their key business activity metrics via a new ASIC Regulatory portal (FY17-18 operations)
December 2018	The levies payable by industry sectors to recover ASIC's FY 2017-18 regulatory costs were summarised and published.
January 2019	ASIC issued levy invoices to regulated entities for FY17-18 regulatory costs, based on the submitted business activity metrics by regulated entities
February 2019	ASIC to publish indicative levies for FY18-19 (based on FY18-19 budget data) as part of Cost Recovery Implementation Statement consultation
March 2019	Entities to pay their levy invoice or face interest penalties

Where can I find the industry funding legislation?

The ASIC Supervisory Cost Recovery Levy Bill 2017 and the ASIC Supervisory Cost Recovery (Collection) Act 2017 came into effect from 1 July 2017.

Where can I find industry funding regulations?

The regulations contain detail about the model, including definitions and levy metrics for each sector. The regulations commenced on 1 July 2017.