Industry rejects another regulatory levy

Key sections of the financial services industry, including the Association of Superannuation Funds of Australia (ASFA), have told the Federal Government they do not want to fund the Australian Transaction Reports and Analysis Centre (AUSTRAC) via another levy.

The rejection of yet another levy on financial services organisations to fund regulatory and supervisory activities has come at the same time as some commentators have warned against the Government imposing a levy to cover regulatory changes emanating out of the Future of Financial Advice (FOFA) — including opt-in.

Dealing with the question of the industry funding the activities of AUSTRAC, ASFA has used a submission on the issue to argue that it is not aware of any other jurisdictions imposing a similar cost recovery regime on regulated entities with respect to anti-money laundering.

It said that while it was true that Government policy and guidelines supported requiring the individual groups that had created the need for regulation to bear the cost, it had not been the financial services industry that had created the need for AUSTRAC.

“Australia’s Anti-Money Launder Counter Terrorism Financing system was established as part of the implementation of revised international standards issued by the Financial Action Task Force on money laundering based on a perceived need to meet international obligations,” the ASFA submission said.

“There is now evidence that AUSTRAC provides reporting entities with government goods and limited evidence that it provides reporting entities with services,” it said. “Also, the supposed benefits that reporting entities obtain from being regulated by AUSTRAC are at best questionable.”

“ASFA contends that by far the biggest beneficiary of AUSTRAC’s regulatory oversight activities is the Government and its various agencies, not the industry,” the submission said.