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05.08.2021

News

Proposed increase to ASIC industry funding levies

ASIC recently released its draft Cost Recovery Implementation Statement (CRIS) for 2020-21 outlining the estimated regulatory costs and industry levies for 2020-21.


Earlier this year we wrote about the 2019-20 levies. Responsible entities (REs) and wholesale trustees are again largely spared, with relatively minor increases to the proposed levy rates:

2019-20 actual levies 2020-21 draft levies
Responsible entities $7,000 plus $16.09 per $1 million of assets above the $10 million threshold $7,000 plus $20.08 per $1 million of total assets above $10m
Wholesale trustees $1,000 plus $1.51 per $1 million of adjusted total assets $1,000 plus $2.82 per $1 million of adjusted total assets
Custodians $496 $699

Financial advice sector

Following significant increases to the 2019-20 levies, ASIC has again targeted the financial advice sector.

The draft CRIS notably outlines the following estimated increases to levies, including:

2019-20 actual levies 2020-21 draft levies
Licensees that provide personal advice to retail clients on relevant financial products $1,500 plus $2,426 per adviser $1,500 plus $3,138 per adviser
Licensees that provide personal advice to retail clients on products that are not relevant financial products $2,064 $2,817
Licensees that provide general advice only $2,081 $2,959
Licensees that provide personal advice to wholesale clients only $29 $27

Case study

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

  • Wholesale trustees: $1,000 plus $2.82 per $1 million of total assets in all unregistered schemes (with some adjustments)
  • General advice (retail or wholesale): $2,959
  • Custodian (including as an incidental provider): $699.

Total: $4,658 plus $2.82 per $1 million of total assets in all unregistered schemes (with some adjustments).

Without factoring in the variable assets under management component, this represents at least $700 in increased levies for a wholesale property fund manager when compared to the current rates.

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.


Next step

Feedback on the draft CRIS can be submitted until 13 August 2021, with final levies published in December 2021 and invoiced in January 2022.


Authors

Elliott Stumm

Elliott Stumm

Partner

Jessica Fuller

Jessica Fuller

Lawyer

Contact McMahon Clarke

Brisbane
T +61 7 3239 2900
A Level 7, 100 Creek Street, Brisbane Qld 4000

Melbourne
T +61 3 9909 1400
A Level 2, 696 Bourke Street, Melbourne Vic 3000