Changes to levies under the new ASIC Industry Funding Model
As we have previously discussed in our article, What you need to know about the new ASIC Industry Funding Model, entities which are regulated by ASIC will need to pay additional levies. Australian Financial Services Licence (“AFSL”) holders have been specifically acknowledged as having increased compliance costs - with the new ASIC Industry Funding Levy being imposed on an annual basis, and a new fee-for-service model will see ASIC recover regulatory activities requested by an entity, directly from that entity. This includes registrations, forms, changes to authorisations, etc.
For example, under the fee-for-service model, the online licence applications fees have increased in some cases by up to 360% compared to the previous fee structure. An AFSL Application for a company will now range from $2,233 - $5,025 depending on the type and complexity of the client and products permitted under the AFSL.
How will the new levies be determined?
The new ASIC Industry Funding levies are charged to AFSL holders annually based on each of the activities permitted to be undertaken under the AFSL, and the type of License held, for example - financial advisors, custodians, managed discretionary account providers, operators of investor directed portfolio services, responsible entities of registered schemes, etc.
The levy will be comprised of a minimum fee component, a graduated (variable) component, or a combination of both.
As an indicative example, for licensees only providing advice to retail clients on relevant financial products, there will be a minimum levy imposed of $1,500 p.a., plus a graduated levy of (estimated) $960 per financial planner that is authorised to provide advice under the licensee.
The variable cost per financial planner depends on ASIC’s actual costs of regulation for the subsector for the year, published in October each year.
Where can you find the new fee-for-service prices?
The fees listed in Schedule 1 of the Corporations (Fees) Regulations Act 2001 have increased across the entire board. We list below a link to the full schedule of all new fees for AFSL holders from 4 July 2018 here.
What needs to be done?
As indicated previously, by 27 September 2019 AFSL holders will need to ensure they log in to the new ASIC Industry Funding Portal, and register their entity details. The bulk of the process is automated, and the data is pre-populated from ASIC’s records, including details of authorised financial planners, licence authorisations, etc.
Once the director or secretary have registered, you can then invite ESV to the portal to connect to the entity as the registered Agent. If you have any questions regarding these changes, please contact your ESV engagement partner on 02 9283 1666.