ASIC levy to continue to fund litigation
The corporate watchdog has outlined that 80% of its funding will be used towards enforcement, supervision, and surveillance activities during the financial year 2021-22.
The Australian Securities and Investments Commission (ASIC) published its corporate plan which said it would continue to “be a strong and targeted law enforcement agency”.
“As ASIC is a law enforcement agency, the volume and results of our surveillance and enforcement activities will remain an important measure of our performance,” it said.
“It will also continue to be of significant interest to our stakeholders and the wider community.”
ASIC chair, Joe Longo, said in his message that the regulator would: “remain an active litigator against misconduct. We will use our full suite of tools and powers to address wrongdoing.
“Our enforcement actions will prioritise areas of greatest harm and the protection of vulnerable consumers and investors.”
ASIC noted that its total funding of $462.6 million in 2021-22 was 6% down from the previous year.
“Our departmental operating appropriation for 2021–22 is $423 million, down 4% due to reduced funding following the partial transfer of the registry function to the Australian Taxation Office,” it said.
“We take a strategic approach to the allocation of our budget so that we can deliver on our priorities. We also maintain flexibility in our budgeting to ensure that our priorities can quickly adapt where there are changes in our regulatory environment during the year.”
ASIC said its industry funding model was a combination of:
- Cost recovery levies, for ongoing regulatory activities that are consistent with the Australian Government Charging Framework;
- Statutory industry levies, for activities the Australian Government has decided should be cross-subsidised between industry subsectors; and
- Cost recovery fees, for user-initiated, transaction based activities where we provide a specific service to individual entities.
The financial planning industry has recently called for enforcement activity to be removed from the adviser levy. This was due to the exponential increase in the levy over the last few years and given its litigation activities were against large institutions that had largely exited the industry but the activity was being funded by smaller advice practices.
Recommended for you
As AFSLs endeavour to meet their breach reporting obligations, a legal expert has emphasised why robust documentation will prove fruitful, particularly in the face of potential regulatory investigations.
Betashares has named the top Australian suburbs with the highest spare cash flow, shining a light on where financial advisers could eye out potential clients.
A relevant provider has received a written direction from the Financial Services and Credit Panel after a superannuation rollover resulted in tax bill of over $200,000 for a client.
Estimates for the calendar year 2024 put the advice industry on track for a loss in adviser numbers as exits offset gains from new entrants.
