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Industry Funding and Business Activity Metrics

The Industry Funding Model allows the Australian Securities and Investments Commission (“ASIC”) to allocate its regulatory costs across 48 industry subsectors based on the actual costs of ASIC’s regulation of each subsector in the previous financial year.

How does the Regime Work?

The main idea behind the regime is that industry participants who create the need for and benefit from ASIC’s regulation bear the costs incurred to supervise the industry. The regime provides an economic incentive for ASIC to drive desired regulatory outcomes in the Australian financial market.

ASIC’s regulatory costs for a particular financial year will be recovered in the form of annual levies from all entities regulated by ASIC during the relevant financial year. The levy will be calculated and payable in the following financial year after ASIC issues each relevant organisation with a notice setting out their liability.

A Cost Recovery Implementation Statement (“CRIS”) is released every year which details ASIC’s Regulatory Costs and how these costs are allocated to participants in the financial services and credit industries.

Key Dates

July - SeptemberAll organisations are required to login to ASIC’s Regulatory Portal to submit and validate their business activity metrics.
October - NovemberASIC publishes indicative levies for the current financial year and its regulatory costs for the previous financial year including levies by subsector.
JanuaryASIC issues invoices for levies based on their previous financial year's regulatory costs. Invoices are required to be paid within 30 business days.

ASIC uses the business activity metrics provided by organisations between July and September to calculate the levies payable for each regulated subsector in the financial year. The type of levy and the formula used to calculate the amount of levy payable varies depending on the size and levels of business activity.

Levy Types and Business Activity Metrics

An organisation’s levy for a financial year will be equal to its share of flat and graduated levies for each subsector it is a part of in that financial year.

Flat Levy

Flat levies share the total cost of regulating a subsector equally among the entities operating in that subsector.

Subsectors with flat levies currently include:

  • Australian Derivative Trade Repository Operators
  • Credit Rating Agencies
  • Custodians
  • Exempt Clearing and Settlement (“CS”) Facility Operators and Tiers 1– 4 CS Facility Operators
  • Exempt Market Operators
  • Insurance Product Distributors
  • Large Futures Exchange Operators
  • Large Proprietary Companies
  • Licensees that provide general advice only
  • Licensees that provide personal advice to retail clients on products that are not relevant financial products
  • Licensees that provide personal advice to wholesale clients only
  • Managed Discretionary Account (“MDA”) Providers
  • Margin Lenders
  • Overseas Market Operators
  • Registered Company Auditors
  • Retail Over-the-Counter (“OTC”) Derivatives Issuers
  • Risk Management Product Providers
  • Small Derivatives Market operators and Exchange Operators
  • Small Securities Exchange Operators
  • Traditional Trustee Company Service Providers
  • Unlisted Public Companies
  • Wholesale Electricity Dealers

Graduated Levy

Graduated levies generally include two components: a minimum amount paid by all entities in a subsector, and a graduated amount based on each entity’s size or level of business activity.

Subsectors with Graduated Levies include:

Auditors of Disclosing EntitiesN/AAudit Fee revenue
Corporate Advisers$1,000Gross Revenue - above $100,000
Credit Intermediaries$1,000Number of credit representatives
Credit Providers (Including small credit amount providers)$2,000Gross credit provided - above $100m (non-small contracts) and gross credit provided (small amount contracts)
Deposit Product Providers$2,000Deposits held - above $10m
Insurance Product Providers$20,000Premiums/revenue less reinsurance expenses - above $5m
Investor Directed Portfolio Services ("IDPS") Operators $10,000Gross revenue from IDPS activity
Large Futures Exchange Operators$9,000Number of messages and transactions
Large Securities Exchange OperatorsN/ATotal transaction value
Large Securities Exchange Participants$9,000Number of messages and transactions
Licensees that provide Personal Advice to Retail Clients on relevant financial products $1,500Adjusted number of relevant advisers
Listed Corporations$4,000Market capitalisation - above $5M, up to $20B
OTC Traders$1,000Number of persons engaged in trading activities
Payment Product Providers $2,000Gross revenue less dealing expenses
Registered Liquidators$2,500Number of appointments and notifiable events
Responsible Entities $7,000Adjusted asset value - above $10M
Securities Dealers$1,000Total transaction value
Superannuation Trustees $18,000Adjusted asset value - above $250m
Wholesale Trustees$1000Adjusted asset value
*Levy amounts correct as at April 2022.

Further Information

The Australian Government passed the Supervisory Cost Recovery Levy Amendment Act 2018 in June 2017 which changed the way ASIC was funded through the introduction of the Industry Funding Model. 

For further information on ASIC’s Industry Funding Regime and how it may affect your business, refer to ASIC’s website or contact the Sophie Grace team.

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