ASIC Finalises Cost Recovery Framework

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Following the proposals paper Proposed industry funding model for the Australian Securities and Investment Commission in November 2016 and legislation passing on 15 June 2017, ASIC have today finalised their cost recovery framework releasing Report 535 ASIC cost recovery arrangements: 2017 -18 which provides the methodology for how industry levies will be calculated.

The first invoices will be issued in January 2019 and will recover costs for regulatory services for the 2017–18 financial year. The fees will be based on the number of regulated entities in a sector and, in most cases, information provided by regulated entities via ASIC’s new online portal. A summary of the changes for those operating in the funds management sector:

  • Companies: Will be charged a flat levy for Public and Pty Companies that are unlisted. The amounts of the fees are likely to be increased.
  • Responsible entities: $7,000 minimum with $10m being threshold for graduated levy.  The graduated component of the levy will be based on the total value of assets as at 30 June in registered schemes, excluding assets that are an interest in another registered scheme operated by the responsible entity.
  • Wholesale trustees: a flat levy is proposed in 2017–18. It will be replaced by a graduated levy in 2018–19, based on the value of assets as at 30 June in all unregistered managed investment schemes issued by the trustee with a minimum levy of $1,000 payable by all wholesale trustees. The value of assets that are an interest in another unregistered managed investment scheme operated by the wholesale trustee will be excluded.
  • Custodians: Will be charged a flat levy and any entity that holds an AFS licence authorising the provision of custodial services is part of the custodian sub-sector and will be charged.
  • Financial Advisors: AFS licensees that only provide general advice will be charged a flat levy.

The funding model also places levies on superannuation trustees, liquidators, payment product providers, credit intermediaries, securities dealers, investment banks, and the insurance sector, among others.

The exact figures for graduated charges will be based on ASIC’s 2017-18 budget by subsector which will be published in October 2017.