In anticipation of the next round of ASIC industry levies, ASIC has this week published its draft Cost Recovery Implementation Statement: ASIC industry funding model (Statement), setting out the estimated industry sector levies for 2018-2019. The draft Statement aims to increase transparency in ASIC’s funding model by outlining their forecasted regulatory activities, costs and cost allocations.
The issuing of the draft Statement follows the introduction of new industry funding arrangements in 2017, which sought to shift the regulatory cost burden from the tax payer to industry participants. As it stands, ASIC anticipates that 90 per cent of regulatory costs will be recovered by industry funding levies, while the remaining 10 per cent will be recovered from fees.
The draft Statement is intended to invite comment from affected entities, as well provide indicative costings to assist their forward financial planning.
Which industry is contributing, and costing, the most?
While a forecast only, the current draft Statement anticipates the biggest budget recovery to come care of listed entities ($62.923m), followed by responsible entities ($29.621m), retail financial advisors ($25.031m) and credit providers ($22.748m), with superannuation and wholesale trustees also expected to make sizeable contributions. A breakdown of the indicative levies is available here. The estimated intake is broadly consistent with ASIC’s 2017-18 regulatory costings, which saw corporate sector regulation take top billing ($70.697m), followed by the investment management and superannuation sector ($44.743m).
Perhaps unsurprisingly given the findings of the recent Royal Banking Commission, 2017-2018 figures place the financial advice sector fourth out of five sectors, with recoverable costs of only $28.260m, of which only $5.706m related to enforcement actions. A per industry breakdown is available here.
Proprietary and listed entity levies
The draft Statement provides a reminder for the corporate sector, noting that while small proprietary companies are not expected to pay industry funding levies:
- large propriety companies are expected to pay a flat levy of $352
- listed corporations are expected to pay a levy of $4,000 plus $0.39 per $10,000 of market capitalisation above $5 million, with a maximum levy of $785,654 payable by listed corporations with a market capitalisation of over $20 billion.
Opportunity to comment
Industry members are encouraged to review the draft Statement and provide comments by 26 April 2019. These comments will inform ASIC’s final Statement, due for release in May 2019. Invoices to recover ASIC's 2018–19 regulatory costs will be issued in January 2020.
Release of Consumer Data Right Draft Rules - 2019.04.02
On 29 March 2019, the Australian Competition and Consumer Commission (ACCC) released the draft Competition and Consumer (Consumer Data) Rules 2019. The draft Rules provide guidance on how Consumer Data Right (CDR) data can be requested
The purpose of the CDR regime is to increase transparency by:
- enabling consumers to request CDR data that relates to them from businesses
- ensuring that business provide public access to information on products that they offer.
While the CDR regime commences in the banking sector, it is expected that consumers will have access to similar data rights across a range of other sectors. Consumers can also expect increased competition in sectors where the CDR regime is introduced, as the CDR regime encourages businesses to be more innovative, price conscious and transparent about their products.
The ACCC is encouraging interested stakeholders to make submissions regarding the rules by 10 May 2019. A pilot of the CDR is scheduled to begin in July 2019.
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