Federal Register of Legislation - Australian Government

Primary content

Other as made
This instrument specifies the Australian Securities and Investments Commission’s regulatory costs and their attribution to each industry sub-sector for the 2020-21 financial year.
Administered by: Treasury
Registered 16 Nov 2021
Tabling HistoryDate
Tabled HR22-Nov-2021
Tabled Senate22-Nov-2021

 

Australian Securities and Investments Commission

 

Explanatory Statement

 

ASIC (Supervisory Cost Recovery Levy—Regulatory Costs) Instrument 2021/0938

This is the Explanatory Statement for the ASIC (Supervisory Cost Recovery Levy—Regulatory Costs) Instrument 2021/0938. The Explanatory Statement is approved by the Australian Securities and Investments Commission (ASIC).

Summary

 

1.       This 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 ASIC’s regulatory costs and their attribution to each industry sub-sector for the 2020-21 financial year.

Purpose of the instrument

 

3.       The purpose of the instrument is to determine ASIC’s regulatory costs and their attribution to each industry sub-sector for the 2020-21 financial year so as to facilitate the collection of industry levies to recover those regulatory costs.

 

4.       Any entity which is a leviable entity is required to pay a levy for each sub‑sector they were a part of at any time during the relevant financial year. The sub-sectors are determined by 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).  

 

5.       This instrument, together with ASIC (Supervisory Cost Recovery Levy—Annual Determination) Instrument 2021/0936, provide ASIC with the figures to enable it to calculate the levies payable by each leviable entity for the 2020-21 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 2022. 

Consultation

6.       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.

7.       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.

8.       ASIC did not engage in consultation before making this legislative instrument. The reason why no consultation was undertaken was because the instrument specifies information that is exclusively within ASIC’s knowledge, being the amount of ASIC’s regulatory costs for the financial year, and the extent to which those costs are attributable to each sub-sector.

Operation of the instrument

9.       The legislative instrument applies in relation to the 2020-21 financial year.

Amount of ASIC’s regulatory costs for the 2020-21 financial year

 

10.     Section 6 of the instrument specifies the amount of ASIC’s regulatory costs for the financial year. ASIC’s regulatory costs were $ 314,092,158.

 

11.     ASIC confirms that the amount of its regulatory costs for the financial year does not exceed the sum of all amounts appropriated by the Parliament for the purposes of ASIC for the financial year, that sum being $464,852,000.

 

12.     ASIC confirms that the amount of its regulatory costs for the financial year did not include:

 

(a)     any amounts relating directly to the regulation of persons and entities that are not leviable entities;

 

(b)     any costs giving rise to amounts debited from a special account established under paragraph 78(1)(a) of the Public Governance, Performance and Accountability Act 2013; or

 

(c)     any costs of the kind mentioned in section 5 of the Cost Recovery Regulations.

 

13.     ASIC confirms that the amount of its regulatory costs for the financial year included the following amounts:

 

(a)     costs relating directly or indirectly to the regulation of leviable entities, including costs relating to surveillance, education, guidance, engagement with industry and policy advice;

 

(b)     the total of all amounts that, in the financial year, are debited against an appropriation and credited to a special account established under paragraph 78(1)(a) of the Public Governance, Performance and Accountability Act 2013 (even if the debits from the special account in the financial year fall short of the amount of those credits);

 

(c)     depreciation of capital costs.

 

14.     ASIC’s regulatory costs for the 2020-21 financial year was increased by $521,341 to take account of the shortfall of collected levy for the 2019-20 financial year.

Attribution of costs to sub-sectors for the 2020–21 financial year

 

15.     Section 7 of the instrument specifies how ASIC’s regulatory costs have been attributed to each sub-sector.

 

16.     There are 51 sub-sectors in relation to the 2020–21 financial year. They are:

 

1.         Auditors of disclosing entities

2.         Australian derivative trade repository operators

2A.      Benchmark administrators  

3.         Corporate advisors

4.         Credit intermediaries

5.         Credit providers

6.         Credit rating agencies

7.         Custodians

8.         Deposit product providers

8A.      Established specialised market operators   

9.         Exempt CS facility operators

10.       Exempt market operators

11.       Insurance product distributors

12.       Insurance product providers

13.       Large futures exchange operators

14.       Large futures exchange participants

15.       Large proprietary companies

16.       Large securities exchange operators

17.       Large securities exchange participants

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

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

20.       Licensees that provide personal advice to only wholesale clients

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

22.       Listed corporations

23.       Managed discretionary account providers

24.       Margin lenders

24A.    New specialised market operators   

25.       Operators of investor directed portfolio services

25A.    Operators of notified foreign passport funds and regulated former notified funds               

26.       Overseas market operators

27.       Over the counter traders

28.       Payment product providers

29.       Public companies (unlisted)

30.       Registered company auditors

31.       Registered liquidators

32.       Responsible entities

33.       Retail over the counter derivatives issuers

34.       Risk management product providers

35.       Securities dealers

36.       Small and medium amount credit providers

38.       Small futures exchange operators

39.       Small securities exchange operators

40.       Small securities exchange operators with self listing function only

41.       Superannuation trustees

42.       Tier 1 clearing and settlement facility operators

43.       Tier 2 clearing and settlement facility operators

44.       Tier 3 clearing and settlement facility operators

45.       Tier 4 clearing and settlement facility operators

46.       Traditional trustee company service providers

47.       Wholesale electricity dealers

48.       Wholesale trustees

 

17.     ASIC had regard to the following principles in attributing its regulatory costs to a sub-sector:

 

(a)     costs relating to the direct regulation of leviable entities in particular sub-sectors are attributed to that sub-sector;

 

(b)     costs relating indirectly to the regulation of leviable entities are attributed to each sub-sector in proportion to the regulatory resources dedicated to that sub-sector;

 

(c)     an excess or shortfall that creates an adjustment under subsection 10(6) of the Cost Recovery Act is attributable the sub-sector in which the excess or shortfall arose;

 

(d)     amounts credited to a special account established under paragraph 78(1)(a) of the Public Governance, Performance and Accountability Act 2013 are to be attributed over time and in a reasonable manner, to the sub-sectors to which the costs giving rise to debits to the special account relate.

Commencement and date of effect

18.     This instrument is a disallowable legislative instrument.

19.     The instrument commences on the day after it is registered on the Federal Register of Legislation, but it 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

20.     Subsection 12(2) (retrospective application of legislative instruments) of the Legislation Act does not apply to this instrument: see subsection 10(8) of the Cost Recovery Act.

Legislative authority

21.     ASIC makes this instrument under subsection 12A(6) of the Australian Securities and Investments Commission Act 2001 (the ASIC Act) for the purposes of subsection 10(2) of the Cost Recovery Act.

22.     Subsection 10(1) of the Cost Recovery Act provides that ASIC’s regulatory costs for a financial year means the amount determined in an instrument under subsection 10(2) for the financial year.

23.     Subsection 10(2) of the Cost Recovery Act provides that ASIC must, by legislative instrument, make a determination specifying the amount of its regulatory costs for a financial year and the extent to which those costs are attributable to each sub‑sector.

24.     Subsection 12A(6) of the ASIC Act provides that ASIC has power to do whatever is necessary for or in connection with, or reasonably incidental to, the performance of its functions. This includes functions conferred on ASIC by or under the Cost Recovery Act. This power extends to the making of instruments in connection with the performance of those functions.

Statement of Compatibility with Human Rights 

25.     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—Regulatory Costs) Instrument 2021/0938

Overview

1.       Subsection 10(2) of the ASIC Supervisory Cost Recovery Levy Act 2017 requires ASIC to make a determination, by legislative instrument, specifying the amount of its regulatory costs for a financial year and the extent to which those costs are attributable to each industry sub-sector.

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 ASIC’s regulatory costs and their attribution to each industry sub-sector for the 2020-21 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.