Earlier this year, the Government announced that it would introduce an industry funding model for the Australian Securities and Investments Commission (ASIC), commencing in the second half of 2017. The Government has now released two papers: a proposal paper which provides a high-level overview of how the industry funding framework could be applied and a supplementary technical paper which provides details of ASIC’s costs of regulating each sector and metrics as to how levies could be calculated.
Under the proposed industry funding model, ASIC’s costs of regulating each sector will be recovered from entities operating in that sector. The financial advice sector and insurance sector are each subject to a range of potential levies which are summarised below.
The proposed levies for the financial advice sector depend on the type of advice provided:
- Licensees that provide personal advice providers on Tier 1 products to retail clients will pay a levy of $960 per adviser listed on the financial advisers register (minimum of $960 levy is payable for entities with no advisers listed on the register);
- Licensees that provide personal advice providers on Tier 2 products to retail clients will pay a $1,500 annual levy;
- Licensees that provide general advice only to retail or wholesale clients will pay a $920 annual levy; and
- Licensees that provide personal advice to wholesale clients only will pay a $170 annual levy.
The proposed levies for the insurance sector depend on whether the entity is an insurance product issuer or an insurance product distributor:
- Issuers will have to pay an anticipated minimum levy of $20,000, plus $0.59 for each $10,000 of net premium review or net earned premium above $5 million;
- Distributors will pay a $2,400 annual levy; and
- Risk management product providers will pay a $4,500 annual levy.
The Government is seeking feedback to the measures outlined in the papers, with roundtables being held during the week commencing 28 November 2016 to provide stakeholders with the opportunity to share their views. Parties interested in participating in these roundtables should send their contact details and sector of interest to ASICfunding@treasury.gov.au. Written submissions may also be made during the consultation period, which ends on 16 December 2016. However, additional public consultations will be held on any legislation prior to it being introduced before Parliament.
This blog was co-authored by DLA Piper graduate solicitor Ann-Marie Coleman.