New funding arrangements for ASIC came into law on
1 July 2017, with all organisations regulated by ASIC required to contribute towards the regulator’s costs incurred in the previous financial year.
Some organisations will be required to pay a flat levy, with the cost of regulating a subsector shared equally among the entities operating in that subsector, while others will pay a graduated levy, with the entity’s size or level of business activity determining their share of costs.
The indicative levies currently used by ASIC are estimates only, and the amounts are likely to change when ASIC’s actual regulatory costs are known in November this year.
For example, in the ‘investment management, superannuation and related services sector’, ASIC’s current indicative levies for 2017-18 are outlined in Table 1.
Note that between July and September 2018, all organisations that ASIC regulates must log on to a new online ASIC portal to submit or validate their business activity metrics.
In June, ASIC will send a letter to the person listed as its contact for each organisation. This letter will contain a unique security key for the portal and detailed information on the process.
ASIC will use the information in these submissions to calculate final invoices, and in future years, generate estimated levy amounts for the entire regulated population.
ASIC will publish its actual regulatory costs in November, along with population and business activity metric data provided by the industry, which will enable entities to better estimate their individual levy.
This data requirement will enable ASIC to calculate each entity’s share of the 2017-18 regulatory costs. Final invoices for the 2017-18 financial year will be issued by ASIC in January 2019.
Personal Advice Model
The final model for licensees providing tier 1 personal financial advice (section 43) includes a fixed levy component plus a graduated levy component using the following formula:
Minimum levy component + graduated levy component
The minimum levy component is $1,500. You must add to this amount the graduated levy component based on the following formula:
Other levies may apply for financial planners
The application of each levy is determined by the authorisations held on your licence and the definition of each section within the regulations. Hence, in addition to the personal advice levy, you may also incur the following levies:
- Insurance product distributor – will capture those authorised to ‘deal’ in general insurance, life risk insurance products or investment life insurance products (section 70);
- Securities dealer – will capture those licensed to ‘deal’ in securities, with more than $250,000 in transactions executed on, or reported to, a large securities exchange in the financial year (section 67);
- MDA – will capture those who provide MDAs, including limited MDA services (section 32).
Other advice levies
If you do not provide tier 1 personal advice, or if you change your advice authorisation during the financial year, you may fall into the following advice levy sub-sectors:
- Licensees that provide only general advice to retail or wholesale clients (section 40);
- Licensees that provide personal advice to only wholesale clients (section 41);
- Licensees that provide personal advice to retail clients on only products that are not relevant financial products (i.e. basic products – section 42).