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This instrument specifies certain metrics for the 2018–19 financial year, which will be used in the formulae specified in the ASIC Supervisory Cost Recovery Regulations 2017 to work out the basic levy component and the graduated levy component, and a leviable entity’s levy component.
Administered by: Treasury
Registered 21 Nov 2019
Tabling HistoryDate
Tabled HR25-Nov-2019
Tabled Senate25-Nov-2019

 

Australian Securities and Investments Commission

 

Explanatory Statement

 

ASIC (Supervisory Cost Recovery Levy—Annual Determination) Instrument 2019/1161

This is the Explanatory Statement for the ASIC (Supervisory Cost Recovery Levy—Annual Determination) Instrument 2019/1161. The Explanatory Statement is approved by the Australian Securities and Investments Commission (ASIC).

Summary

 

1.       The instrument relates to levies imposed on ASIC’s regulatory population. These industry levies are imposed on an annual basis. The annual levies are aimed at recovering ASIC’s regulatory costs for the financial year.

 

2.       This instrument specifies certain matters about size and composition of ASIC’s regulated population and of the metrics that apply to each industry sub-sector within that regulated population for the 2018-19 financial year.

Purpose of the instrument

 

3.       The purpose of the instrument is to specify certain matters that are used in the formulae specified in the ASIC Supervisory Cost Recovery Levy Regulations 2017 (the Cost Recovery Regulations). The Cost Recovery Regulations are made for the purposes of the ASIC Supervisory Cost Recovery Levy Act 2017 (the Cost Recovery Act).  

 

4.       The matters are the sub-sector population and the sub-sector metrics in relation to the basic levy component and the graduated levy component.

 

5.       This instrument, together with ASIC (Supervisory Cost Recovery Levy—Regulatory Costs) Instrument 2019/1160, provide ASIC with the figures to enable it to calculate the levies payable by each leviable entity for the 2018-19 financial year. ASIC will use the figures in these instruments in preparing the invoices for the levies which will be sent out to the industry in January 2020. 

 

6.       The Cost Recovery Regulations prescribe 7 sectors and 52 sub-sectors for the 2018–19 financial year as follows:

 

(a)     the corporate sector (comprising 6 sub-sectors);

 

(b)     the deposit-taking and credit sector (comprising 6 sub-sectors);

 

(c)     the investment management, superannuation and related services sector (comprising 8 sub-sectors);

 

(d)     the financial advice sector (comprising 4 sub-sectors);

 

(e)     the market infrastructure and intermediaries sector
(comprising 24 sub-sectors);

 

(f)      the insurance sector (comprising 3 sub-sectors);

 

(g)     the large institutions sector (comprising 1 sub-sector).

 

7.       Either a basic levy component or a graduated levy component is applied to each sub-sector. A leviable entity may form part of 2 or more sub-sectors in a sector. The amount of levy payable by a leviable entity is the sum of each levy component the entity has for the financial year.

 

8.       The basic levy component and the graduated levy component, for a leviable entity for a sub-sector for a financial year, is worked out according to formulae specified in the Cost Recovery Regulations.       

 

9.       ASIC confirms that:

 

(a)     before ASIC made this instrument for the financial year, it was satisfied, having regard to information provided to ASIC, that the instrument is consistent with the objectives stated in subsection 9(2) of the Cost Recovery Act; and

 

(b)     this instrument was made after the last day by which returns relating to the financial year must be lodged with ASIC under section 11 of the Collection Act. ASIC determined that day to be 26 September 2019.

Consultation

 

10.     Section 17 of the Legislation Act 2003 (the Legislation Act) provides that, before a legislative instrument is made, the rule-maker must be satisfied that there has been undertaken any consultation that is considered by the rule-maker to be appropriate, and reasonably practicable to undertake.

 

11.     In determining whether any consultation that was undertaken is appropriate, the rule-maker may have regard to any relevant matter, including the extent to which the consultation drew on the knowledge of persons having expertise in fields relevant to the proposed instrument.

 

12.     ASIC did not engage in consultation before making this legislative instrument. The reason why no consultation was undertaken was because the instrument specifies numbers and amounts that are calculated based on the information contained in the returns lodged with ASIC under section 11 of the ASIC Supervisory Cost Recovery Levy (Collection) Act 2017 (the Collection Act).

13.     In certain circumstances, ASIC may give a leviable entity a notice (a default notice) stating the amount that, in ASIC’s opinion, is the levy payable by the leviable entity for a financial year. These circumstances, which are set out in section 12 of the Collection Act, includes where a person has failed to provide to ASIC a return containing information relating to the leviable entity or ASIC is not satisfied with information provided by a person in a return.

14.     The amount stated in the default notice is taken to be the levy payable by the person for the financial year, unless the contrary is proved. While the issue of default notices involves the exercise by ASIC of a discretionary power where the amount of the levy stated in the default notice is based on ASIC’s opinion, it is anticipated that ASIC would only have cause to issue default notices in a minority of cases.

 Operation of the instrument

15.     The legislative instrument applies in relation to the 2018–19 financial year.

 

16.     The instrument specifies certain matters (numbers and amounts) that are used in the formulae specified in the Cost Recovery Regulations.

 

Sub-sector population

 

17.     Section 6 of the instrument specifies the sub-sector population for the financial year. The sub-sector population, in relation to a sub-sector, for a financial year, means the number of entities that form part of the sub-sector at any time in the financial year.

 

18.     ASIC worked out the number of entities that form part of the sub-sector at any time in the financial year based on the information contained in ASIC’s registers and in the returns lodged with ASIC under section 11 of the Collection Act.

 

Sub-sector metrics—basic levy component and the graduated levy component

 

19.     Section 7 of the instrument specifies the sub-sector metric in relation to the basic levy component and the graduated levy component for the financial year.

 

20.     The sub-sector metric in relation to the basic levy component is the sum of the amounts of the basic rate entity metric for each leviable entity that forms part of the sub-sector for the financial year. The basic rate entity metric for each leviable entity for each sub-sector is the entity’s entity metric for that sub-sector for the financial year.  However, not all sub-sectors have an entity metric.  In those cases, the basic rate entity metric for each leviable entity for that sub-sector will be 1.

 

21.     The sub-sector metric in relation to the graduated levy component means a number that is the sum of the amounts of the graduated entity metric for all leviable entities that form part of the sub-sector for the financial year. The graduated entity metric means the entity’s entity metric for the sub-sector for the financial year.

 

22.     The following table gives a brief description of the entity metric to which the numbers specified in the table in section 7 of the instrument relate. If Part 3 of the Cost Recovery Regulations does not make provision for an amount to be the entity metric for a sub‑sector, then the following table describes the entity metric as “not applicable”. 

 

Column 1

Column 2

Column 3

Item

Sub-sectors

Description of entity metric

 

 

Basic levy component

(as applicable)

Graduated levy component

(as applicable)

1

Auditors of disclosing entities

Total of the fees paid or payable to the entity for the auditing and review of financial reports

 

2

Australian derivative trade repository operators

Number of days the repository was operated

 

2A

Benchmark administrators

Number of days the entity administered the financial benchmark  

 

3

Corporate advisors

 

Gross revenue

4

Credit intermediaries

 

Number of credit representatives

5

Credit providers

 

Gross amount of credit provided

6

Credit rating agencies

 

Number of days the licence was held

7

Custodians

“Not applicable”

 

8

Deposit product providers

 

Value of deposits

8AA

Entities subject to close and continuous monitoring

Alternative thresholds based on total value of deposits or number of relevant providers

 

8A

Established specialised market operators

Number of days the market was operated

 

9

Exempt CS facility operators

Number of days the facility was operated

 

10

Exempt market operators

Number of days the market was operated

 

11

Insurance product distributors

“Not applicable”

 

12

Insurance product providers

 

Gross amount of premiums and other revenue

13

Large futures exchange operators

Number of days the exchange was operated

 

14

Large futures exchange participants

 

Messages and lots

15

Large proprietary companies

“Not applicable”

 

16

Large securities exchange operators

Value of all transactions on exchange

 

17

Large securities exchange participants

 

Messages and transactions

18

Licensees that provide only general advice to retail clients or wholesale clients 

“Not applicable”

 

19

Licensees that provide personal advice on relevant financial products to retail clients

Number of financial advisers

 

20

Licensees that provide personal advice to only wholesale clients

“Not applicable”

 

21

Licensees that provide personal advice to retail clients on only products that are not relevant financial products

Number of days the licence was held

 

22

Listed corporations

 

Market capitalisation

23

Managed discretionary account providers

Number of days the licence was held

 

24

Margin lenders

Number of days the licence was held

 

24A

New specialised market operators

Number of days the market was operated

 

25

Operators of investor directed portfolio services

 

Gross revenue

25A

Operators of notified foreign passport funds and regulated former notified funds

 

Value of Australian assets

26

Overseas market operators

Number of days the market was operated

 

27

Over-the-counter traders

 

Number of persons acting on behalf of the entity

28

Payment product providers

 

Gross revenue received in connection with non‑cash payment products issued by the entity less expenses incurred from dealing in non‑cash payment facilities

29

Public companies (unlisted)

“Not applicable”

 

30

Registered company auditors

“Not applicable”

 

31

Registered liquidators

 

Appointments, notices and lodged documents

32

Responsible entities

 

Value of assets in all registered schemes

33

Retail over-the-counter derivatives issuers

Number of days the licence was held

 

34

Risk management product providers

Number of days the licence was held

 

35

Securities dealers

 

Value of transactions in securities

36

Small and medium amount credit providers

Gross amount of credit provided 

 

38

Small futures exchange operators

Number of days the exchange was operated

 

39

Small securities exchange operators

Number of days the exchange was operated

 

40

Small securities exchange operators with self-listing function only

Number of days the exchange was operated

 

41

Superannuation trustees

 

Value of assets in all registrable superannuation entities

42

Tier 1 clearing and settlement facility operators

Number of days the facility was operated

 

43

Tier 2 clearing and settlement facility operators

Number of days the facility was operated

 

44

Tier 3 clearing and settlement facility operators

Number of days the facility was operated

 

45

Tier 4 clearing and settlement facility operators

Number of days the facility was operated

 

46

Traditional trustee company service providers

Number of days the licence was held

 

47

Wholesale electricity dealers

“Not applicable”

 

48

Wholesale trustees

 

Value of assets in all unregistered managed investment schemes

 

23.     ASIC worked out each sub-sector metric based on the information contained in ASIC’s registers and in the returns lodged by the leviable entities with ASIC under section 11 of the Collection Act.

Commencement

24.     This instrument is a disallowable legislative instrument.

25.     The instrument takes effect in accordance with paragraphs 11(3)(a) and 11(4)(a) of the Cost Recovery Act. This means the instrument takes effect at the end of the special disallowance period, being a period of 5 sitting days after the instrument has been tabled in both Houses of Parliament. The instrument does not take effect to the extent it is disallowed by either House of Parliament.

Retrospective application

26.     Subsection 12(2) (retrospective application of legislative instruments) of the Legislation Act does not apply to this instrument: see subsection 9(9) of the Cost Recovery Act.


Legislative authority

27.     Section 73 of the Cost Recovery Regulations, which is made for the purposes of subsection 9(6) of the Cost Recovery Act, enables ASIC to make an annual determination specifying matters required or permitted by those regulations.

28.     ASIC makes this instrument under section 73 of the Cost Recovery Regulations.

Statement of Compatibility with Human Rights 

29.     The Explanatory Statement for a disallowable legislative instrument must contain a Statement of Compatibility with Human Rights under subsection 9(1) of the Human Rights (Parliamentary Scrutiny) Act 2011. A Statement of Compatibility with Human Rights is in the Attachment.


Attachment

Statement of Compatibility with Human Rights

 

This Statement of Compatibility with Human Rights is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

ASIC (Supervisory Cost Recovery Levy—Annual Determination) Instrument 2019/1160

Overview

1.       Section 73 of the ASIC Supervisory Cost Recovery Levy Regulations 2017, which is made for the purposes of subsection 9(6) of the ASIC Supervisory Cost Recovery Levy Act 2017, enables ASIC to make an annual determination specifying matters required or permitted by those regulations.

2.       The instrument relates to levies imposed on ASIC’s regulatory population. These industry levies are imposed on an annual basis. The annual levies are aimed at recovering ASIC’s regulatory costs for the financial year.

3.       This instrument specifies certain matters about size and composition of ASIC’s regulated population and of the metrics that apply to each industry sub-sector within that regulated population for the 2018-19 financial year.

Assessment of human rights implications

4.       This instrument does not engage any of the applicable rights or freedoms.

Conclusion

5.       This instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.