Australia: ASIC user-pays regime to commence 1 July 2017

From 1 July 2017, ASIC's regulatory costs will be recovered from Australian companies and other "leviable entities" across all industry sectors regulated by the Australian Securities and Investments Commission (ASIC) under an industry funding model (Industry Funding Model). On 22 February 2017, the exposure draft legislation (and explanatory materials) (Proposed Legislation) to establish the framework for the Industry Funding Model was released for public submissions.

The Industry Funding Model was announced by the Federal Government on 20 April 2016, following the final report of the Government's Financial System Inquiry (Inquiry) on 7 December 2014 that both consumers and the industry have little understanding of the cost associated with facilitating ASIC's supervisory role and as a flow on effect, ASIC has limited accountability.

The Industry Funding Model has therefore been put forward with the intention of ensuring ASIC's funding be borne by those entities that have created a need for it in place of the taxpayers, establishing price signals to drive economic efficiencies with regard to the allocation of ASIC's resources, and improving transparency and accountability.

The Proposed Legislation comprises of:

  • ASIC Supervisory Cost Recovery Levy Bill 2017 (Levy Bill) 1;
  • ASIC Supervisory Cost Recovery Levy (Collection) Bill 2017 (Collection Bill)2;
  • ASIC Supervisory Cost Recovery Levy (Consequential Amendments) Bill 2017;
  • ASIC Supervisory Cost Recovery Levy - Exposure Draft Explanatory Materials.

In this alert, Partners Michael Hansel, Robyn Ferguson, Senior Associate Katherine Hammond and Solicitor Christina Hooper explain how the Industry Funding Model will work, who it will affect, and the obligations and liabilities those affected can expect to have imposed on them from 1 July 2017.

In Summary

  • All entities that are regulated by ASIC will be required to pay an annual levy.
  • Entities will be required to lodge an annual return after the end of each financial year.
  • ASIC will calculate its regulatory costs for a year and the Government will retain control over the maximum amount of regulatory costs that may be recovered.
  • ASIC will group entities into different classes, sectors and sub-sectors, and will apportion the regulatory costs to entities according to the various categories.
  • The aggregate amount that ASIC recovers from the annual levies is not to exceed ASIC's regulatory costs for that year, and that there should not be cross-subsidisation in that regulatory costs that do not relate to a particular sector or subsector should not be recovered from that sector or subsector.
  • The Industry Funding Model will commence on 1 July 2017. Entities will be required to pay levies for the first time for the 2017/2018 financial year.
  • There will be penalties and potentially fatal consequences for entities that do not comply.

Summary of Industry Funding Model

The effect of the Proposed Legislation is that entities that are regulated by ASIC during a financial year (Leviable Entities) will be required to pay a levy to recover ASIC's regulatory costs. The levy will be payable by entities in the following financial year once ASIC has issued a notice setting out their liability to pay the levy.

The objective of the Industry Funding Model is that the total amount of levy paid by all entities should not exceed ASIC's total regulatory costs against all sub-sectors for a particular financial year. The regulations will provide methods and formulas for how ASIC's regulatory costs are to be apportioned across the various sectors and sub-sectors that it regulates.

Each Leviable Entity will be required to submit a return to ASIC containing information that will be used to calculate the levy. ASIC will then issue a legislative instrument setting out what its regulatory costs were in relation to a financial year, as well as matters that are required by the methods or formulas to apportion its regulatory costs across Leviable Entities.

After the levy amount has been determined for a financial year, ASIC will issue notices to entities setting out the levy amount and when it will be due and payable.

Who does it apply to?

The obligation to pay the ASIC levy will apply to a "Leviable Entity" which is a person who is a "Regulated Entity" at any time in the financial year and is not an exempt entity for that financial year.

A "Regulated Entity" is defined to include a number of entity types that are regulated under various Acts that ASIC administers, namely:

  • a company that is registered under the Corporations Act 2001;
  • a company that is a disclosing entity under section 111AC(1) of the Corporations Act 2001;
  • a financial services entity;
  • a credit services entity;
  • a market infrastructure entity;
  • an audit entity;
  • a liquidator entity;
  • a company-like entity; or
  • a person regulated by ASIC who is in a class of persons prescribed by the regulations.

Because some of the entity types that make up the definition of Regulated Entity are not legal persons, the liability is imposed on each member of such entity types which are treated as a person for the purposes of the Proposed Legislation, namely each:

  • partner in a partnership;
  • member in an association;
  • trustee that is part of a group of individual trustees that hold an RSE licence; and
  • trustee of a trust treated as a single 'notional entity' for the purposes of the Levy Bill.

What obligations will the Proposed Legislation impose on Leviable Entities?

Essentially the Proposed Legislation will:

  • impose an additional reporting obligation on Leviable Entities to lodge a return with ASIC in the approved form (Annual Return) in respect of a financial year by 31 October of the following financial year. The approved form may require the Annual Return to include information relating to the Leviable Entity, and information relating to one or more other Leviable Entities; and
  • require Leviable Entities to pay an annual levy.

When will the Industry Funding Model commence?

The Proposed Legislation is intended to commence on 1 July 2017, with the first year that ASIC will recover its regulatory costs being the 2017-2018 financial year. This means that Leviable Entities will be required to lodge an Annual Return by 31 October 2018 and can expect a levy notice from ASIC thereafter.

How much will the levy be?

The amounts payable each year will be set out through a combination of regulations (made by the Governor General) and legislative instruments (made by ASIC). The regulations will set out the methods or formulas that will be used to apportion ASIC's regulatory costs. ASIC's annual legislative instrument will set out certain information that will be required by the methods or formulas (such as ASIC's regulatory costs and aggregated sub-sector information contained in the returns).

The amount of levy payable by a Leviable Entity for a financial year is the amount worked out in accordance with the regulations.

The regulations may specify different rates for different classes, sectors or sub-sectors of Leviable Entities. The sectors or sub-sectors will be defined in the regulations. A Leviable Entity may fall within more than one sub-sector.

The formulas for calculating the levies must be consistent with the objectives that:

  • the total amount of levy payable by all Leviable Entities for a financial year must equal ASIC's regulatory costs for that financial year; and
  • the total amount of levy payable by all Leviable Entities in a particular class, sector or sub-sector in a financial year must equal the amount of ASIC's regulatory costs relation to that class, sector or subsector for that financial year.

The rationale for this is that the Government should not be able to recover more than ASIC's regulatory costs, and that there should not be cross-subsidisation of particular entities regulated by ASIC – regulatory costs that do not relate to a particular sector or subsector should not be recovered from that sector or subsector.

How much of ASIC's regulatory costs will be recovered?

ASIC will be required to calculate its regulatory costs for a financial year in an instrument made after the last day on which returns must be lodged with ASIC by Leviable Entities.

There is scope for the Government to retain control over what costs may be recovered from the industry by allowing for the regulations to prescribe amounts that ASIC may not include in the amount included in the legislative instrument.

For the purposes of calculating the levies, ASIC's regulatory costs are then defined to mean the lesser of:

  • the total amounts appropriated by the Parliament for the purposes of ASIC for the financial year; and
  • the amount determined by ASIC in the instrument for the financial year.

When must the levy be paid?

A levy will become due and payable for a financial year when ASIC issues a notice in relation to that financial year which will provide at least 30 days for payment. Consequently, it will depend on how long it takes ASIC to calculate the regulatory costs, issue the legislative instrument, and issue levy notices. At the earliest, the levy will be payable at the end of November after the financial year.

What happens if you don't comply?

Failure to pay the levy by the due date will attract a 20% late payment penalty.

If a person fails to give an Annual Return to ASIC, ASIC may issue a default notice prescribing a levy and the person will also be liable to a strict liability criminal offence.

Where a person has made a false or misleading statement to ASIC in an Annual Return which results in them paying a lesser amount, they will be liable to a shortfall penalty of double the shortfall.

Where a levy, shortfall penalty or late payment penalty remains unpaid for 12 months, a range of administrative actions may be taken against the person, including deregistration and licence suspension or cancellation.

Will ASIC be accountable?

ASIC will be required to publish information on its website in relation to its regulatory costs for the previous financial year as soon as practicable after 31 October each year (from 31 October 2018), including:

  • ASIC's total regulatory costs in relation to Leviable Entities;
  • how ASIC has apportioned those costs across each sector and sub-sector;
  • in relation to each sector, how ASIC has apportioned its costs by reference to the types of activities undertaken, and the different kinds of expenses incurred by ASIC in the financial year; and
  • other information that may be required by the regulations.

This is intended to increase the transparency of ASIC's costs to its regulated population.

Abolition of Market Supervision Cost Recovery Regime

Since 1 August 2010, ASIC has had responsibility for market supervision. To recover the costs of the performance of its market supervision functions, since 1 January 2012, ASIC has imposed fees on ASX Limited and Chi-X Australia Pty Limited cash equity market participants under a 'market supervisory cost recovery regime' developed by Treasury and ASIC in consultation with industry. The introduction of the Industry Funding Model will render this existing market supervision cost recovery regime unnecessary.

Public consultation

The public may make submissions on the Proposed Legislation until 10 March 2017.

Additional public consultation will be held on the regulations necessary to support the model prior to their consideration by the Executive Council.


1 The Levy Bill imposes a levy on persons regulated by ASIC to recover its regulatory costs.

2 The Collection Bill empowers ASIC to collect the levy and requires entities to submit returns annually so that ASIC is able to calculate the levy.

© HopgoodGanim Lawyers

Award-winning law firm HopgoodGanim offers commercially-focused advice, coupled with reliable and responsive service, to clients throughout Australia and across international borders.

2015 AFR Beaton Client Choice Awards:
Best Law Firm (revenue $50m - $200m)
Best Professional Services Firm (revenue $50m - $200m)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Katherine Hammond
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.