ASIC warned to deliver regulatory value for money
Superannuation funds are facing base-line levies of at least $60,000 a year to fund the Australian Securities and Investments Commission (ASIC) and the cost will ultimately be passed on to members, according to the Association of Superannuation Funds of Australia (ASFA).
On this basis, ASFA says its members want to ensure that ASIC is actually providing value for the money they are being asked to pay.
In a submission to Treasury on the proposed ASIC Cost Recovery Levy Regulations, ASFA has repeated its assertion that the scope of the funding model is too broad and that there is a danger that industry participants will end up paying for ASIC activity that does not directly relate to regulation.
“ASFA considers that the scope of the funding model is too broad, and has expressed these concerns in previous submissions,” it said. “In particular, ASFA considers that some of ASIC’s regulatory activities cannot be directly attributed to identifiable industry recipients and so should not be incorporated in the levy.”
“With respect to the superannuation sector, the ASIC levies (which are set out in the draft regulations) will impose a high cost burden on the superannuation industry,” the submission said. “For a medium‐sized fund, the figures in Treasury’s Proposals Paper (of November 2016) suggest that base‐line levies will be in the order of $60,000 per year. Many funds will be subject to additional levies.”
It said the ASIC levies would be ultimately borne by fund members and would be reflected in members’ retirement incomes.
“As such, ASFA considers that it is incumbent on ASIC to be more accountable for its regulation of the superannuation industry (and the broader financial system),” the submission said. “To this end, ASIC needs to demonstrate that the levies are set and spent appropriately and it is improving the efficiency of its regulatory effort – including by minimising the impact of regulation on the regulated population.”
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