With the government passing a new ASIC industry funding model
through the Senate yesterday (15 June), the financial industry looks set to be hit with further charges.
The ASIC Supervisory Cost Recovery Levy Act 2017
will come into effect on 1 July, imposing an additional annual levy on entities regulated under ASIC.
The purpose of the bill is to “ensure that the costs of the regulatory activities undertaken by ASIC are borne by those creating the need for regulation, rather than Australian taxpayers” and improve ASIC’s transparency and accountability to the industry.
Affected entities include those providing credit services and financial services as well as companies registered under the Corporations Act.
The levy will recover ASIC’s costs for the financial year from those who were regulated during that time period.
“The levy will be calculated and will become payable in the following financial year, once ASIC has issued the leviable entity with a notice setting out their liability for the levy.”
“Leviable entities may be required to give a return to ASIC that includes information that will be used to calculate the levy. Where ASIC does not require entities to provide information to calculate the levy, then those entities will not have to provide a return.”
The amount payable will be calculated through “a combination of regulations and legislative instruments”. Furthermore, different formulas may be used for various entities within the credit and financial services sectors.
ASIC will issue a notice to those required to pay the levy, setting down the total amount payable and the date it is due. Those who fail to pay by this date will attract a late payment penalty of 20% per annum unless granted an extension.
“Where a levy, shortfall penalty, or late payment penalty remains unpaid for a period of 12 months, a range of administrative actions may be taken against the person, including deregistration, licence suspension or cancellation, as is appropriate in the case.”
Those who fail to provide a return or who supply an inadequate amount of information will be given a default notice for the amount that ASIC deems the individual or firm should pay. Those who fail to provide a return will also be liable under a criminal office.
The law stipulates that the total levy paid across all financial players will not exceed the total regulatory costs of ASIC for the year.
The government originally introduced the model on 20 April 2016, following 23 other federal governments including the UK, US and Germany which have implemented similar industry-funded policies. A proposals paper was released on 7 November with the Treasury receiving 231 submissions. Draft legislation was released for public consultation on 22 February this year.
“This is an important milestone not just for ASIC, but also for the companies and wider corporate sector that we regulate,” ASIC chairman Greg Medcraft said.
“Industry funding, in one form or another, applies to other areas of public oversight in Australia and in many comparable economies around the world. Not only will the different elements of the broad business sector more fairly share the load, but the taxpaying public will benefit through the more accountable use of the funds provided for the task.”
The new funding arrangements will help ensure that Australia retains its highly admired system of corporate regulation supported by the rule of law, he said.
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