New laws came into effect on 1 July 2017 changing the way ASIC is funded. Under the new arrangements, any entity that is regulated by ASIC will now need to pay a levy for the financial year they were regulated in. This new 'industry pays' system is to recover ASIC's regulatory costs, with the first invoices to be issued in January 2019 – recovering the costs for the 2017-18 financial year. An 'industry pays' model has been implemented so that the funding of regulatory activities undertaken by ASIC are met by those creating the need for regulation, rather than the Australian taxpayer.
ASIC has now published its indicative levies for the 2017-18 financial year.
How much will regulated entities have to pay?
Regulated entities have been categorised into 6 sectors and 48 subsectors across all corporate entities subject to the Corporations Act 2001 (Cth). ASIC's regulatory costs will be allocated among these subsectors through either a flat levy or a graduated levy. A flat levy shares the cost of regulating a subsector equally among the entities operating in that subsector. A graduated levy is based on the entity's size or level of business activity which determines their share of costs.
Between July and September each year, regulated entities will provide ASIC with their business activity metrics for the previous financial year via the new Regulatory Portal which is expected to launch mid-2018. ASIC will use the information in these submissions to calculate final invoices, and in future years, generate estimated levy amounts for the entire regulated population.
The metrics used to calculate the levy for each subsector will include one or two of the following:
- revenue generated
- total assets
- credit provided
- deposits held for deposit product providers
- number of new and ongoing appointments for registered liquidators.
What are the 2017-18 indicative levies?
The indicative levies which were recently published by ASIC are based on its budgeted allocation of regulatory costs for each financial year and estimates of the population and business activity metrics for each of the 48 subsectors to which levies apply. ASIC's forecast for its 2017-18 regulatory costs is $238 million. This is the amount that ASIC expects it will need to recover from regulated entities. However, the indicative levies remain an estimate and the amounts are likely to change when ASIC's actual regulatory costs are known later in the year.
ASIC will publish its actual regulatory costs in November, along with population and business activity metric data provided by industry, which will enable entities to better estimate their individual levy.
This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.