Industry Funding – ASIC’s 2019-2020 Cost Recovery Implementation Statement Released

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Cost Recovery Implementation Statement

Australian Securities and Investments Commission (ASIC) has released the actual levy amounts for the 2019-2020 financial year. The Cost Recovery Implementation Statement (CRIS) details ASIC’s costs and how these costs are allocated to participants in the financial services and credit industries. 

We encourage all AFSL and ACL holders to:

  1. login to the Regulatory Portal to download your regulatory funding invoice and ensure payment is made prior to 23 April 2021; and
  2. update your cashflow projections and budgets based on the 2019-2020 levies.

Comparison between 2018-2019 and 2019-2020:

Overall, the actual levies are higher than the levies for the 2018-19 financial year. We have highlighted below some of the key subsectors.

Corporate SubsectorsNumber of EntitiesActual Levy Amounts ($)Levy Metric and Description
2018-20192019-20202018-20192019-2020
Retail OTC Derivatives Issuers10599$48,858$108,084 Number of days authorised
Payment Product Providers664657$2,000Minimum levy of $2,000 plus $0.37 per $1 million of total revenue from payment product provider activity Revenue from payment product provider activity
Securities Dealer9531,030Minimum levy of $1,000 plus $14.60 per $1 million of annual transaction turnoverMinimum levy of $1,000 plus $2.71 per $1 million of annual transaction turnoverAnnual transaction turnover value
Responsible Entities464449Minimum levy of $7,000 plus $16.91 per $1 million of assets above the $10 million thresholdMinimum levy of $7,000 plus $16.09 per $1 million of assets above the $10 million thresholdAdjusted total assets and number of days authorised
Wholesale Trustees1,6851,693Minimum levy of $1,000 plus $13.12 per $1 million of adjusted total assetsMinimum levy of $1,000 plus $1.51 per $1 million of adjusted total assetsAdjusted total assets and number of days authorised
Financial Advice Providers - AFS licensees that provide personal advice to retail clients on relevant financial products3,0512,991Minimum levy of $1,500 plus $1,142 per adviser.Minimum levy of $1,500 plus $2,426 per adviserAdjusted number of advisers on the Financial Advisers Register and number of days authorised
Financial Advice Providers - AFS licensees that provide personal advice to retail clients on products that are not relevant financial products645625$200$2,064Number of days authorised
Financial Advice Providers - AFS licensees that provide general advice only1,0201,004$723$2,081Flat levy
Financial Advice Providers - AFS licensees that provide personal advice to wholesale clients only1,5791,624$114$29Flat levy
Credit Providers (including small and medium amount credit providers)1,1491,096Minimum levy of $2,000 plus $0.34 per $10,000 of credit provided above $100 million (for contracts other than small and medium amount credit contracts)Minimum levy of $2,000 plus $0.51 per $10,000 of credit provided above $100 million (for contracts other than small and medium amount credit contracts)Credit provided in the financial year (contracts other than small and medium amount credit contracts)
Small and medium amount Credit Providers237226$8.06 per $10,000 provided under small and medium contracts$15.14 per $10,000 provided under small and medium contractsCredit provided in the leviable financial year under small and medium amount credit contracts
Credit Intermediaries5,0364,653Minimum levy of $1,000 plus $42.26 per credit representativeMinimum levy of $1,000 plus $61.76 per credit representativeCredit representatives and number of days authorised

What do the levies pay for?

ASIC expects that $324.5 million of its total budgeted resources for 2019-2020 ($429.6 million) will be recovered by the cost recovery levies and statutory industry levies. A further $2.8 million in unrecovered costs from 2018-2019 will also be recovered.

The CRIS notes that a key focus over the 2019-20 financial year was to implement new approaches to ASIC’s supervisory and enforcement activities. The funding supported the work of the Royal Commission, including ASIC’s response to the recommendations of the Hayne Royal Commission and the following new ASIC activities:

  • accelerated enforcement strategy underpinned by the ‘Why not litigate?’ operational discipline;
  • expansion in regulation of financial services in accordance with the recommendations of the Hayne Royal Commission;
  • ASIC’s close and continuous monitoring program;
  • strengthened supervision of the superannuation sector, including taking required enforcement action;
  • creating ASIC’s new role in administering an executive accountability regime; and
  • establishment of a corporate governance taskforce to undertake reviews of corporate governance practices in large listed entities.

The CRIS also includes a brief description of the various activities ASIC undertakes which are subject to industry funding (via the general industry levy). These include:

  • Supervision and surveillance – via the review of breach reports, conducting interviews and collecting documentary information, using information gathering powers (for example, under section 912C of the Corporations Act);
  • Enforcement – undertaking investigations, litigation, administrative decision-making and handling appeals;
  • Financial capability work – leading the National Financial Capability Strategy to educate, provide impartial information, targeted guidance and support in relation to financial literacy;
  • Industry engagement – consultation with industry, attending industry liaison meetings, responding to inquiries and requests for information;
  • Education – teaching of financial literacy in schools and workplaces, publications on ASIC’s MoneySmart website, developing tools for consumers;
  • Guidance – developing and consulting on regulatory proposals, issuing ASIC legislative instruments;
  • Policy advice – researching innovation, proposals on law reform, submissions to parliamentary and government inquiries on law reform;
  • Financial capability work – supporting financial literacy, delivery and providing access to financial information, supporting partnerships with other organisations.

Further reading

You can find the CRIS in full here.

If you have any questions or concerns regarding your industry funding invoice, you can contact us.

About The Author

Alicia Pevely

An integral member of the Sophie Grace team since 2012, Alicia has extensive experience in relation to financial services law, consumer credit law, regulatory matters and ASIC investigations. Working closely with her clients, Alicia has maintained a significant emphasis on AFS and credit licensing and liaising with ASIC. As General Manager, Alicia has oversight of all licence applications and provides advice and support in relation to more complex applications.  

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