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Credit intermediaries will be charged less than originally estimated, according to ASIC’s final industry funding costs for FY2023–24.
The broking industry will pay a total of $2.89 million in levies to cover the cost of the financial services regulator’s work supervising the sector in the financial year ending 2024.
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The Australian Securities & Investments Commission (ASIC) has released its annual dashboard report for 2023–24, showing the final costs it will recover from the finance industry as part of the industry funding model.
Overall, ASIC will invoice the finance industry a total of $328.11 million to cover the costs of its regulatory activities over the last financial year ending June 2024.
Of this, the broking industry will receive a total levy of $2.89 million, less than the $3.11 million originally estimated.
The final industry cost is 7 per cent less than expected and nearly a third down on the costs recovered in FY23 (when ASIC needed around $4.27 million to cover its regulatory costs for the industry).
Why the drop?
According to the regulator, the majority of the reduction came down to a larger-than-expected variance in policy advice (25 per cent down on estimates), a 23 per cent drop in the adjustment for the prior year, and a 22 per cent drop in the costs for supervision and surveillance.
Enforcement costs, industry engagement, and indirect costs (such as corporate support and legal services) were also lower than estimated earlier in the year.
Invoices will be issued to the 4,214 credit intermediary entities ASIC regulates (which have 40,728 credit representatives working under them) between January and March 2025.
How does broking stack up against the rest of the finance industry?
While the broking industry will see final costs coming in lower than expected, the bill for credit providers (lenders) will be 10 per cent more than ASIC originally estimated. According to ASIC, it will need to recover $31.3 million from credit providers – around $2.8 million more than the $28.5 million originally estimated.
When looking at the entire deposit-taking and credit entities regulated by ASIC (for example, including payment product providers, deposit product providers, margin lenders, and small amount lenders), the cost will be $50.92 million for FY24.
However, as is typically the case, the corporate sector will be responsible for covering the largest bill from ASIC – at $89.59 million.
This is followed by the market infrastructure and intermediaries sector (e.g. OTC derivative issuers, futures, and securities exchange participants etc) ($60.45 million) and then the investment management, superannuation, and related services sector ($58.53 million).
The final levy costs come after ASIC mistakenly published the incorrect levies for the industry in its draft cost recovery implementation statement (CRIS) for FY23–24.
According to the original CRIS, published in July 2024, ASIC credit intermediaries would be subject to a minimum levy of $1,000 for FY24.
However, Greg Ashe, the director of compliance specialists, QED Risk Services, said that charging a minimum levy of $1,000 to each credit intermediary entity would have resulted in ASIC collecting more than $4.2 million, not $3.1 million, as listed.
Ashe, notified ASIC of the error, which ASIC acknowledged before updating the CRIS.
At the time, an ASIC spokesperson told The Adviser: “While $1,000 is the minimum levy set by the Regulations, where our actual costs will result in a levy that is less than $1,000 per licensee, the levy amounts recovered would be adjusted to avoid an over-recovery.
“Given we received a query on it, we considered it prudent to change it as there are a large number of participants in the subsector and we wanted to avoid any potential for further confusion.
“To confirm, we never over-recover our regulatory costs for any subsector under ASIC industry funding.”
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