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The FBAA has warned it will be “keeping a very close eye on” ASIC fee estimates towards 2023.
The warning comes after Australian Securities and Investment Commission (ASIC) released its final cost Recovery Implementation Statement: ASIC industry funding model (2021–22) on Monday (24 October).
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In June of this year, the regulator called for feedback for its industry levies, which it estimates will be slightly down on last year’s costs.
The levies, based on ASIC’s planned regulatory work and associated costs for the 2021–22 financial year, are to be finalised in December and invoiced between January and March 2023, the report has confirmed.
ASIC estimated it will recover, ultimately, $332.3 million of its 2021–22 regulatory costs via industry funding levies.
For FY22, it expects to recover $10.897 million from the 4,413 credit intermediary entities (as per the meaning of the National Credit Act) it regulates, the report read.
This marked a decrease of about 3.6 per cent on last year’s levies, when it recovered $11.36 million.
For FY22, costs would be $1,000 plus $171.97 per credit representative, it explained.
While finalised fees and levies for credit intermediaries won’t be released until the end of the calendar year, there’s hope these estimates won’t end up being doubled again.
Speaking to The Adviser, the managing director of the Finance Brokers Association of Australia (FBAA) said estimates and final levies have been very different in the past.
“We will be keeping a very close eye on this as we head into the end of 2022 to ensure we do not see the poor outcomes of last year,” FBAA managing director Peter White AM explained.
“FBAA has been a long-time stakeholder to Treasury and ASIC and have recently, last week, met with Treasury on further consultation on the Industry Funding Model (IFM).
“We hope that this year fees will come down, but we won’t know until December (for now) what the estimated fee due in January 2023 will be.
“But the main issues we’ve been dealing with — with Treasury and ASIC — is the outcomes of last year, where the estimate fee was announced and then in January the fee had doubled. This cannot happen again.
“We have placed submissions to Treasury and ASIC and had multiple conversations on this point and we hope this will not reoccur this year — and for all expectations, it won’t.
“We have requested greater transparency on the sub-sectors impacting fee anomalies, plus those that are not providing credit assistance albeit hold and ACL be taken out of the costing to brokers who are providing credit assistance.”
When reality bites it often hurts
As reported in The Adviser, the objective behind ASIC’s estimates is to help regulated entities budget for the upcoming costs; however, earlier this year, the regulator was met with ire when the final costs for its regulatory program, for the last financial year, resulted in much higher than anticipated.
For FY20–21, the regulator indicated intermediaries would be charged around $96.55 per credit representative — but the final charges were $184.31 per credit representative.
Ultimately, this figure was nearly triple the levy from the previous financial year, when credit intermediaries were charged $61.76 per rep. As such, while ASIC had estimated it would recoup $8.15 million from credit intermediaries last year, it ended up collecting $11.36 million.
Brokers await the final verdict
This month (21 October), ASIC released its 22-285MR Industry funding: 2021-22 Cost Recovery Implementation Statement (CRIS), as required under the Industry Funding Model (IFM).
The statement detailed ASIC’s estimated levies by industry sector and subsector.
ASIC released the draft CRIS in June 2022 (22-130MR) for feedback and the October final statement summarised the feedback received.
Final industry levies will be based on ASIC’s actual regulatory costs and the business metrics submitted by entities in each subsector, ASIC confirmed.
Final levies will be published in December 2022 and invoiced between January and March 2023, ASIC explained.
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