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Levies for ASIC industry funding (2017-2018) coming your way

ASIC industry funding commenced on 1 July 2017. A new version of the Cost Recovery Implementation Statement (CRIS) was released for comment last month, with account stakeholder feedback to be considered in the lead-up to a final version likely to be published in early 2018.

This article highlights some areas of concern for advisers with an AFSL - limited or full, particularly in relation to those who run highly compliant, low-risk advice businesses.

Bronny Speed, Director, AccountantsIQ Pty Ltd

Key issues for ASIC to consider:

  1. 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.
  2. 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.
  3. 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.

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Lawyer in Profile

Paul Ellis
Paul Ellis
Special Counsel
+61 3 9258 3524

Qualifications: LLB, Deakin University, BA (Political Science), Monash University

Paul is a Special Counsel in Maddocks Government and Not-for-Profit Commercial team. He specialises in:

  • the establishment, governance, operations, regulation and administration of charities and other not-for-profit entities,
  • in commercial arrangements for the procurement or supply of goods and services, including technology services, and
  • in compliance and enforcement activities undertaken by government agencies.

Paul is Maddocks' main authority in relation to the Personal Property Securities Act 2009.

He has an in-depth understanding of the government sector, as his experience prior to Maddocks includes 13 years with the Victorian Department of Justice.

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