ASIC published its draft Cost Recovery Implementation Statement (CRIS) for 2019-20 on Friday, revealing its guidance for what regulatory costs the financial services sector could cop under the body’s industry funding model.
But the version, now open for consultation, was prepared on the basis of the regulator’s regulatory work and budgeted allocation of costs at the beginning of the 2019-20 year – without reflecting ASIC’s adjusted work program to respond to the COVID-19 pandemic.
The final regulatory costs will be published in December, with invoices issued in January next year.
Cost recovery levies, charges imposed when a good, service or regulation is provided to a group of individuals or organisations (such as an industry subsector), were indicated in the statement to come to $236.1 million – 23 per cent higher than outlined in the CRIS the year before.
Statutory levies, which fund activities the government has decided should be cross-subsidised between industry subsectors (such as education for consumers), totalled at $57.4 million, 35 per cent higher year-on-year.
The total regulatory costs recovered through levies, estimated at $293.5 million, is up by 6 per cent from the final amount the year before, as shown in ASIC’s annual dashboard report.
Meanwhile the total for fees for service, which cover user-initiated, specific services to individual entities such as licensing, was down by 24 per cent from the previous CRIS figure to $15.8 million.
ASIC has signalled it will recover costs of $58.9 million through levies for surveillance, the bulk of which comes from cost recovery levies of $53.8 million. The year before its total for supervision came to $40 million, as indicated in its annual dashboard report.
Enforcement is proposed to cost the industry $96.1 million, 27 per cent higher than what it cost the year before, with $54.1 million in cost recovery levies and $42 million in statutory levies.
ASIC expects to recover $5.8 million in regulatory costs from the big four banks and AMP, for surveillance under the close and continuous monitoring program, rising from $3.6 million the year before.
The investment management, superannuation and related service sector face total levies of $64.3 million, 13 per cent per cent higher year-on-year, consisting of $48.9 million in cost recovery levies and $15.4 million in statutory levies.
For superannuation trustees in particular, ASIC has budgeted costs of $4 million for surveillance, $6.4 million for enforcement and $1.1 million for its financial capability work.
Super trustees are expected to cough up $24.9 million in total costs through levies. ASIC reported the cost of regulating super trustees in 2018-19 was $17.2 million.
For responsible entities, total costs to be recovered by levy came to $29.5 million. The cost of regulating the segment the previous year was $25.9 million.
Market infrastructure and intermediaries have regulatory recovery costs of $46.4 million, down on $51.1 million the year before.
Meanwhile the financial advice sector could cop a total levy of $37.3 million, up by a third from $34 million in 2018-19.
Stakeholders are invited to provide their feedback on the cost recovery statement to ASIC by 24 July.
