ASIC's budgeted regulatory costs and indicative industry funding levies were off the mark with the actual levies for 2019-2020 coming in notably higher than initially indicated by ASIC. Happily, responsible entities (REs) and wholesale trustees seem to have again been spared. However, the financial advice sector was not as fortunate.

Industry funding model

Now in its third year of operation, the ASIC industry funding model enables ASIC to recoup its regulatory costs, such as surveillance, enforcement, industry engagement and policy advice.

As part of the funding model, in around March each year ASIC publishes a Cost Recovery Implementation Statement (CRIS) which sets out ASIC's budgeted regulatory costs for the financial year and the indicative levies ASIC proposes to impose to recover these costs from industry. In around January each year ASIC publishes its actual regulatory costs and issues invoices for the levies payable for the financial year. Payment of levy invoices is due in March.

2019-2020 industry funding levies

The 2019-2020 CRIS was delayed due to the impact of the COVID-19 pandemic. Only last Thursday, ASIC published the actual industry funding levies payable for 2019-2020. ASIC says levy invoices will be issued shortly but has not specified a payment date.

The levies are notably higher across most of the six sectors and 48 subsectors than initially indicated by ASIC in the 2019-2020 CRIS. A key exception is for REs and wholesale trustees:

• REs:
  • indicative levy: minimum levy of $7,000 plus $19.65 per $1 million of total assets in all registered schemes (with some adjustments) above $10 million
  • actual levy: minimum levy of $7,000 plus $16.09 per $1 million of total assets in all registered schemes (with some adjustments) above $10 million.
• Wholesale trustees:
  • indicative levy: minimum levy of $1,000 plus $13.37 per $1 million of total assets in all unregistered schemes (with some adjustments)
  • actual levy: minimum level of $1,000 plus $1.51 per $1 million of total assets in all unregistered schemes (with some adjustments).

The financial advice sector was one of the sectors hardest hit by ASIC's levy blowout:

• Licensees who provide personal advice to retail clients:
  • indicative levy: minimum of $1,500 plus $1,571 per adviser
  • actual levy: minimum of $1,500 plus $2,426 per adviser.
• Licensees who provide general advice only (whether to retail or wholesale clients):
  • indicative levy: $813
  • actual levy: $2,081.

Expected levy

By way of example, a 'typical' wholesale property fund manager could expect to be invoiced the following amount:

• Wholesale trustees: $1,000 plus $1.51 per $1 million of total assets in all unregistered schemes (with some adjustments)
• General advice (retail or wholesale): $2,081
• Custodian (including as an incidental provider): $496.

Total: $3,577 plus $1.51 per $1 million of total assets in all unregistered schemes (with some adjustments).

Please note, the amount of the levy invoice will depend on the "subsectors" an AFS licensee falls within, which depends on a range of factors.

Your levy invoice

We encourage you to contact us if you have any queries or concerns about your levy invoice. ASIC says it is acutely aware of the challenges facing many businesses due to COVID-19 and is committed to working with businesses facing difficulties paying industry funding levies. You may be eligible to apply for a payment plan or levy penalty waiver.