Are you paying too much for your ASIC Industry Funding Levy?
ASIC has now issued levies for the 2017 – 2018 financial year. These invoices were due to be paid by 15 March 2019. Late payment penalties apply from 1 April 2019 and these are as 20% per annum of the overdue levy amount.
This is the first year of the new regime where ASIC will recover most of its regulatory costs from regulated industries. Many AFS Licensees and Credit Licensees have been surprised by the levies received.
These levies comprise of Flat or Graduated levies. Graduated levies can include a minimum levy and also a variable component or a combination of both. These levies have been imposed on AFS Licensees and Australian Credit Licensees depending upon their Licence Authorisations. It is possible that Licensees with broad authorisations could find themselves in multiple sectors and being charged a number of levies (e.g. Responsible Entities who are also authorised to provide financial product advice in relevant financial products; Financial Planner who are also authorised to deal in life insurance or general insurance products).
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There are many AFS Licensees who hold authorisations on their licence that were:
- based on previous business models; or
- were as a result of transitioning to an AFS Licence during the FSR Regime (e.g. some licences were Issue with Deal Issue Deposit Products or Non-Cash Payment Products).
Licensees should consider whether these authorisations are relevant as they may impact the levies to be charged.
You may consider that these authorisations are valuable to the business and prefer to retain these licence authorisations in the event that you might require them. However, ASIC prefers that licensees remove the unnecessary authorisations to lessen their regulatory burden.
By removing unnecessary authorisations, the Levies associated with your AFS Licence may be significantly reduced.
How can we assist?
Holley Nethercote can assist you to review your business models to give you practical advice on your licensing requirements and licence authorisations. We can also assist in preparing variation applications to amend your licences to the appropriate licence authorisations.
Author: Frank Varga (Head of Licensing)