Key issues for ASIC to consider:
- At this stage, there doesn't seem to be any thought of loading the levy towards those AFSLs who conduct 'higher' risk activities such as Managed Discretionary Accounts (MDAs), gearing and property developments. These areas have traditionally been the source of ASIC enforcement activity.
- To date, it appears as if the levy will be based on size (revenue) of an advice business, without taking into consideration the type of activities the advice business offers.
- Clarification has been sought on whether AFSLs that are limited will have a favourable cost reduction to those that are not. This is because most full AFSLs have a broader product range than those that are limited.
How ASIC might take these factors into consideration
ASIC has implemented a thorough surveillance program over past years and, as such, has access to those AFSLs who have required enforcement activity.
It would therefore seem to be 'fair' to the industry as a whole if ASIC was to 'load' those AFSLs with a higher levy if:
- They had incurred enforcement activity previously and/or
- They operated in an area of licensing that had previously been the subject of repeated enforcement activity.
More Cleardocs information on related topics
You can read earlier ClearLaw articles on a range of professional adviser topics.