The Australian Securities and Investments Commission (ASIC) is having the way it is funded changed, with the passage of the ASIC Supervisory Cost Recovery Levy Bill 2017 through its first reading in Parliament and a second reading moved. Could new levy ASIC’s costs recouped from SMSF practitioners?
Why this could be a concern for SMSF trustees is that the levy could be imposed on their advisers and auditors. The draft legislation says that it is intended to be imposed “on persons regulated by” ASIC to recover its regulatory costs.
As the explanatory memorandum (EM) accompanying the bill explains (read all the relevant documentation here), the new levy is intended 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”.
The Minister for Revenue and Financial Services, Kelly O’Dwyer, said in a media release announcing the legislation: “This is the next step in implementing the government’s commitment to recover ASIC’s regulatory costs from the entities that create the need for regulation, rather than the Australian taxpayers, who too often bear the costs of financial sector misconduct.”
Intended to commence from July 1 this year, the levy will recover ASIC’s regulatory costs from companies and other “leviable entities” across all industry sectors that it regulates. The EM defines a regulated entity as including:
- a company that is registered under the Corporations Act 2001;
- a company that is a disclosing entity under section 111AC(1) of the Corporations Act 2001;
- a financial services entity;
- a credit services entity;
- a market infrastructure entity;
- an audit entity;
- a liquidator entity;
- a company-like entity; or
- a person regulated by ASIC who is in a class of persons prescribed by the regulations.
(More precise definitions of the above can be found in section 7 of Parliament’s copy of the Act.)
This “industry funding model” will require all such entities to lodge an annual return to ASIC for each income year with which the regulator will calculate the amount of levy for each (so the first payment will be for the 2017-18 year). Entities will be grouped into different classes, sectors and sub-sectors, and ASIC will apportion its costs across the various categories.
Tax & Super Australia is yet to be advised whether the levy is expected to put more cost pressure on SMSF auditors and/or advisers, which in turn could be felt by trustees and members. We will publish more as the legislation makes its passage through Parliament and more details become available.