Fees-for-service activities

This page outlines how fees for service are set.

Fees for service are user initiated. A regulatory form is lodged with ASIC for each fee-for-service activity.

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Activities included in fees for service

Licence application or variation services and registration application services

AFS licensing, credit licensing and professional registration

We assess whether a new applicant meets certain minimum statutory standards for AFS licensing, credit licensing or professional registration (with the exception of the registration of registered liquidators, which is done by independent committee). Each application is subject to a risk-rated assessment, where we apply more effort to applications with a higher risk profile. This enables us to allocate resources more effectively and efficiently. Our aim is to ensure that only suitable persons and organisations are licensed or registered, and that applicants are only licensed to provide financial and credit services and products that they are competent to provide. Our approach involves considering all of the information known to ASIC and any other information collected from the public or other regulatory bodies.

As a result of our assessment, licensing or registration applications may be:

  • rejected – we may reject applications for lodgement because they are manifestly defective and information and content included in the application does not meet the minimum standards
  • withdrawn – during our assessment we may provide feedback and requisition further information from the applicant. This may cause the applicant to withdraw their application, rather than proceed
  • approved – we may assess applications as meeting the requirement to obtain a licence or licence variation, or for professional registration
  • modified – we may grant a licence that is different from that applied for, or that has additional conditions imposed on it. For example, we might:
    • impose a key person requirement, require the applicant to appoint a compliance consultant, or tailor a special condition to limit the scope of the activity authorised under the licence, or
    • approve a narrower range of financial services or financial products that the applicant is allowed to offer than was applied for, or
  • refused – we may refuse applications because we are not satisfied that the statutory requirements for granting a licence or registration have been met.

In addition to applying for new licences, existing licensees may apply to vary their licence to undertake more, or fewer, financial or credit services. Such variations may be the result of changes in a licensee’s business activities or in response to changes in organisational competence. For example, a licensee may wish to expand the scope of its financial services or credit activities or the financial products it deals in or advises on.

There is a narrower range of regulatory assessments for professional registrations, given the requirements that must be met are more limited compared with licensees.

Financial markets, clearing and settling (CS) facilities, financial benchmarks and trade repositories

We are responsible for assessing licence applications for new financial markets, CS facilities, trade repositories and financial benchmark administrators. The team also assesses applications from entities seeking exemptions from some or all of the licensing requirements.

The Corporations Act sets out the market licensing regime (Part 7.2), the CS facility licensing regime (Part 7.3), the financial benchmark administrator licensing regime (Part 7.5B) and the licensing regime for trade repositories (Part 7.5A). The Corporations Act also empowers the Minister (or ASIC as a delegate of the Minister) to exempt a financial market, CS facility, trade repository and financial benchmark administrator from one or more of the licensing requirements. While we receive significantly fewer of these types of applications than applications for AFS and credit licences, they are typically larger and involve a higher degree of complexity in assessment.

When we assess these licence applications, our objective is to facilitate effective capital formation and risk management. This, in turn, will drive good consumer and investor outcomes and maintain the trust and integrity in the Australian financial system. This approach helps achieve our vision for a fair, strong and efficient financial system for all Australians.

To achieve this objective we may reject, approve, modify or refuse a licence application. We may modify the application by imposing additional conditions. For example, we might impose a condition on the licence that the licensee must:

  • not commence operating the market until they have provided evidence that they have adequate financial resources to cover the projected cash outflows for the first six months of operation of the market, or
  • confirm to ASIC in writing that it has employed or engaged all necessary people in all of the positions described in the application and that, as a result, has sufficient human resources to operate the market properly in accordance with its obligations under the Corporations Act.

Registration of a managed investment scheme

When an application to register a managed investment scheme is lodged with ASIC, our Investment Managers team will assess whether it complies with section 601EA of the Corporations Act. We must register the scheme within 14 days of lodgement unless it appears to us that the application does not meet one or more of the requirements.

When assessing an application to register a scheme, we may seek clarification about specific provisions in the scheme’s constitution or require further information about the compliance plan. We may also ask for amendments to specific provisions in the constitution or compliance plan if they do not appear to comply with the requirements in the Corporations Act. If it appears to us that the application does not comply with section 601EA, and a responsible entity or its advisers are unwilling or unable to amend the application or provisions as required within this 14-day period, we will refuse to register the scheme.

Compliance review of documents lodged with ASIC (such as a prospectus or other compliance document)

We undertake compliance reviews of a number of documents related to commercial transactions to promote good consumer and investor outcomes and maintain trust and integrity in the financial system. In reviewing these documents, we are concerned with identifying disclosure deficiencies and whether the disclosure complies with the law.

Compliance reviews of documents are primarily carried out by our Corporations team and Investment Managers team. These teams concurrently consider any relief sought to facilitate the transactions, as appropriate. In addition, we monitor the conduct of entities party to these transactions for compliance with requirements of the Corporations Act.

The types of activities and documents that we review for compliance include:

  • fundraising offers that require a disclosure document to be lodged with ASIC
  • Product Disclosure Statements (PDSs) that must be lodged with ASIC
  • control transactions, including takeover bids, court-ordered schemes of arrangement, and other acquisitions to be approved by shareholders or members (including in trust schemes), and
  • related party transactions.

We do not conduct a compliance review of every document lodged with ASIC. In some cases we employ a risk methodology to identify the documents that we will target for review.

We will intervene to protect investors if, in a compliance review of a document, we identify disclosure or conduct issues that may undermine market integrity and investor outcomes.

The regulatory outcomes we may achieve through compliance reviews of documents include:

  • corrective disclosure lodged with ASIC and provided to investors
  • structural changes to the form of a transaction, so that unacceptable circumstances are remedied and the transaction proceeds in a manner consistent with the principles in the Corporations Act
  • identification and removal or rectification of misleading advertising and/or statements
  • stopping the transaction, and in some instances, using ASIC’s stop-order powers, or
  • if we are unable to resolve our concerns, we may take other action, including applying to the Takeovers Panel for a declaration of unacceptable circumstances or to the court for orders under sections 1324 or 1325A of the Corporations Act.

Requests for changes to market operating rules

Market and CS facility licensees have an ongoing statutory obligation to inform ASIC of any changes to the operating rules of a licensed market or licensed CS facility. Our Markets teams assess these changes in light of the licensee’s obligations and the potential effect of the changes on the operation of the facility they are licensed to operate. Where required, the Markets teams will provide a recommendation to the Minister or their delegate about whether all, or a specified part, of the change to the operating rules should be disallowed.

Assessment of applications for relief

ASIC has discretionary powers to grant relief from certain provisions of:

  • the Corporations Act
  • the Superannuation Industry (Supervision) Act 1993 (SIS Act)
  • the National Consumer Credit Protection Act 2009 (National Credit Act), and
  • the National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009.

The relief includes exemptions from and modifications to the provisions of these Acts. The provisions of the Corporations Act where we most frequently exercise ASIC’s discretionary powers involve financial reporting, takeovers, fundraising, managed investment schemes, licensing and disclosure requirements for financial products. By granting appropriate relief, we allow the law to be flexible in its application, address unintended consequences of the law, and facilitate innovation.

We will consider and determine all applications for relief based on the facts, circumstances and merits of each individual application. In determining a particular application, we will take into account:

  • our vision and regulatory objectives
  • any considerations that we are required to take into account under the law
  • the statutory context in which the discretionary power to grant relief appears, and the subject, matter, scope and purpose of the provisions of which it forms part
  • any relevant policy we have published and the underlying principles of that policy
  • the regulatory consequences that would flow from granting the relief on the conditions proposed, including whether:
    • strict compliance with the provisions in the legislation would be impossible or disproportionately burdensome, and
    • consumers would still have the protection intended by Parliament, and
  • our procedural fairness obligations to third parties.

We also attempt to achieve two broad objectives – consistency and definite principles. For more detail on our general approach to applications for relief, see Regulatory Guide 51 Applications for relief (RG 51).

Generally, an application for relief that is made in accordance with ASIC’s existing policy will take less time to consider than an application that raises novel issues. Novel issues are those that require ASIC to formulate substantive new policy because they:

  • raise new policy considerations
  • involve more than the application of existing policy (legislative policy or ASIC policy) to new situations, or
  • involve a significant change to, or reversal of, existing ASIC policy.

When considering a novel issue, we:

  • may obtain internal legal advice on the relief sought
  • will consider the policy implications of the application, to determine whether the relief should be granted and, if so, on what conditions (this may involve liaising internally on policy issues and may take time), and
  • may also seek public comment.

The additional costs associated with novel applications over and above the flat fee will be recovered under the industry funding levies. We recover the additional costs associated with novel applications for relief under the industry funding levies because:

  • novel applications often have a wider industry benefit, by drawing our attention to the need for regulatory change or clarification where there are unintended consequences of the law
  • the significantly higher costs associated with novel applications for relief may deter applicants from seeking relief regarding areas of law where regulatory change is desirable, and
  • a subsequent decrease in novel applications may mean that individually, entities face an increased regulatory burden and, industry wide, innovation and new policy development is hindered.

Activities excluded from fees for service

Certain lodgement fees

The fee for lodgement of certain forms are not recovered under fees for service. We have determined that we previously collected lodgement fees on approximately 60 forms, the funds of which were used to support work across an industry, rather than activities undertaken for an individual entity. An example of this is the lodgement of annual compliance certificates for credit licensees. In these cases, we no longer charge fees on lodgement and these activities are funded by the ongoing industry funding levies.  

Registry business 

In April 2021, as a first step in the progressive rollout of the Modernising Business Registers (MBR) program, the Commissioner of Taxation was appointed as the Registrar. The role of the Registrar is to lead and implement the MBR program and perform statutory registry functions as a delegate of ASIC. ASIC’s registry staff have moved to the Australian Taxation Office (ATO) to assist the Registrar, through a machinery of government change. At a later date, the Registrar will assume primary responsibility for the registry functions under law. 

The costs associated with the remainder of our registry activities, including indirect costs will not be recovered through the industry funding model. The fees attached to ASIC forms relating to updating an ASIC registry database will not be cost recovered under the Australian Government Charging Framework. These fees will continue to be set separately as a general tax, meaning the benefits to particular individuals as a result of these services are not typically distributed in proportion to the taxation payments made by those individuals.  

How fees-for-service amounts are calculated

The fee-for-service amounts are set in regulations – see fees for service schedule (PDF 344 KB). These are reviewed every three years to reflect any necessary updates to the amounts due to changes in our business processes or other reasons. 

The fees are calculated based on the key business processes involved in undertaking the service. For example, for processing an application for registration of an authorised audit company, the business processes are as follows:  

  • We receive an application into our workflow systems, which includes the submission of an electronic form and supporting proof documents.
  • An analyst is assigned the application and will initially review it at a high level to determine if the applicant provided the required information. If the application is incomplete, it may be rejected and not accepted for lodgement. 
  • If accepted, the analyst will review the application to determine the scope of the assessment process and whether the analyst should consult ASIC’s specialist supervisory teams about the application. The analyst will review the application and supporting documentation in detail.
  • The analyst assesses whether ASIC is satisfied that the applicant is capable of performing the duties of an auditor (including meeting the auditing competency standards or having the requisite practical experience) and is a fit and proper person to be registered as an auditor.
  • The analyst will document their assessment of the material in an assessment worksheet. This worksheet is subject to supervisor review.
  • If the application is to be refused, we send a detailed statement of concerns to the applicant. The applicant may contest the analyst’s concerns or withdraw their application. If the application is contested, the analyst prepares a detailed brief to be reviewed by a senior person before the matter is referred to an ASIC delegate, who will convene an administrative hearing to provide the applicant an opportunity to be heard before final determination by the ASIC delegate. 

The relevant costs are attributed to the business process for each fee-for-service activity. The costs are attributed using a weighted average hourly rate. The hourly rate is calculated for each team involved in the business process and includes indirect costs (made up of property, information technology (IT) and corporate services costs), apportioned according to average full-time equivalent (FTE) staff. 

The weighted average hourly rate for each of our regulatory teams was calculated to ensure we comply with the Australian Government Cost Recovery Guidelines and only recover efficient costs.  

Our teams are not structured identically, and comprise a varying mix of staff at different levels of seniority and at different salary bands within those seniority levels. Therefore, we do not set a standard hourly rate for the agency as a whole, but instead calculated weighted average hourly rates in accordance with the specific profile of the different teams.  

In some cases, more than one team contributes to a regulatory activity. When this happens, different weighted average hourly rates are applied to capture our efficient costs of the activity.  

The total fee amount is determined by multiplying the weighted average hourly rate by the regulatory effort (i.e. the average number of hours) required to assess and process each form. 

Tiered fees for service

Under the fees-for-service model, the fees payable may not match our exact costs in all cases. This is particularly likely for fees-for-service activities that can vary widely in their complexity, such as a notice of changes to operating rules.  

For these type of activities, the model adopts a more granular approach to determine the fees payable based on the complexity of the application. This ensures that entities pay the appropriate fee based on the complexity of the transaction for the service we provide and allow ASIC to closely recover the actual cost.  

We tier these fees to reflect the regulatory effort associated with the fees-for-service activities. There are tiered fees based on complexity for the following regulatory activities:  

  • AFS licence applications 
  • credit licence applications 
  • market licence applications
  • notices of changes to market and CS facility operating rules, and 
  • CS facility licence applications.  

The complexity of an AFS licence application will be determined based on the applicant type and the financial service and product authorisation the applicant is seeking. Market licence applicants will be directed to contact a member of our Market Infrastructure team when submitting an application for a preliminary assessment of the complexity of the application. 

To determine the efficient cost of assessing an application for an AFS licence, the weighted average hourly rate for the Licensing team is multiplied by the average time spent processing and assessing the application. The level of complexity of the application determines the seniority of the staff working on the application and the average time taken to assess the application. For example, more experienced and qualified staff will assess a highly complex application, resulting in a higher hourly rate, and the assessment will, on average, take longer to finalise.  

The criteria we apply to determine the complexity of an application is set out in ASIC (Fees—Complexity Criteria) Instrument 2018/578

Last updated: 28/06/2023 05:45