The government has succeeded in securing an industry funding model for the Australian Securities and Investments Commission (ASIC), with the ASIC Supervisory Cost Recovery Levy Bill 2017 and related bills passing through the Senate.
The industry funding model will deliver ASIC an additional $127.2 million funding package, which the government says “will significantly enhance data analytics and surveillance capabilities and facilitate proactive enforcement” – in short, more people and stronger powers.
ASIC has welcomed the passage of legislation enabling a more secure and accountable funding of the model for regulation of the Australian corporate sector, indicating an increase in its specialist officer numbers overlooking the financial industry.
Effective from 1 July 2017, ASIC’s regulatory costs will be recovered from all industry sectors regulated by ASIC through annual levies. The total figure mentioned in the Government’s White Paper was at the $240 million mark for the coming financial year, with the top five banks accounting for approximately half of the levy.
ASIC chairman Greg Medcraft welcomed the legislation’s passage, and highlighted the fact it enjoyed widespread support across the political spectrum.
“This is an important milestone not just for ASIC, but also for the companies and wider corporate sector that we regulate,” he said.
“Industry funding, in one form or another, applies to other areas of public oversight in Australia and in many comparable economies around the world. Not only will the different elements of the broad business sector more fairly share the load, but the taxpaying public will benefit through the more accountable use of the funds provided for the task.”
ASIC has gone through a few years of upheaval in terms of its staff numbers, reportedly losing 80 in 2011 and a further 230 following Tony Abbott’s budget cut in 2014. Whilst ASIC had its personnel numbers largely restored once its $120 budget cut was restored last year, the regulatory burden of the financial market will require it to add further to its financial specialist team. The increased total revenue will also allow the regulator to boost its numbers in other areas of responsibility.
The industry funding model is in large part a response to the recommendations of the 2014 Murray Financial System Inquiry and the 2013 Senate Inquiry into ASIC’s performance, both of which were largely critical of the organisation’s ability to respond effectively due to it having “limited powers and resources”.
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