The Australian Securities and Investments Commission has finalised details of how levies for its new cost recovery model will be calculated, and while further details are still to come, businesses are being urged to prepare for the fees that will kick in this financial year.
In June, the federal government passed legislation to assist the financial regulator in raising about two thirds of its $300 million annual budget by passing fees onto companies, which will pay new levies based on their size and sector classification.
The move was welcomed by small business groups, with Council of Small Business Australia chief executive Peter Strong telling SmartCompany last month the levy model had been on the table since 2010, when the Labor Party started considering calls for the bigger end of town to pay their fair share for ASIC’s regulatory services.
The first invoices for these levies will be issued in January 2019, but businesses should start factoring them in now, says ASIC chairman Greg Medcraft, because the charges will apply for the 2017-2018 financial year.
Get business news first
Sign up to SmartCompany’s daily newsletter
“ASIC will continue to support industry to comply with their obligations as they become due,” he said on Friday.
For larger listed companies, the annual levy will be calculated by a formula that uses the company’s market capitalisation, while listed companies with a market capitalisation of $5 million or less are set to pay a flat fee of $4000.
Details on the exact fees for some businesses are still unclear, and ASIC says another report will be released later this year to help companies prepare.
Different levy calculations will apply to each sector, while small proprietary companies with revenue and entities of less than $25 million will see an annual increase to the review fees they already pay to ASIC.
SmartCompany has contacted ASIC for further details on the scale of these increases and what these will mean for small proprietary companies this year. A spokesperson said more details on the exact costs will be available in a statement to be released in October this year.
At this stage, here is what businesses can expect in terms of how the new fees will be calculated:
|Company type||Fee calculation|
|Small proprietary company
Large proprietary company
| An increase in the annual company review fee from July 1, 2018, with further details released in October.
A to-be-determined levy will apply to large businesses with revenue of $25 million or more, less the cost of the increase in annual company review fee these businesses will have to pay.
|Registered liquidator|| The annual fee liquidators have to pay to ASIC has been halved from $5,000 to $2500.
There will then be a new graduated levy component determined by the number of administrations and events a liquidator completes each year.
|Payment product providers||Businesses in this space will pay a graduated levy based on revenue from the 2018-19 financial year, starting at $2000.|
|Credit intermediary||A levy will be charged based on how many authorised representatives these businesses have at June 30 each year.|
|Superannuation trustees||A levy will be charged on the total number of assets held by the entity at June 30.|
|Crowdsourcing intermediaries||Fees for these businesses are to be confirmed once licensing arrangements are finalised by government for crowdfunding models.|
|Investment banks|| Corporate advisers will be charged $1000 and a graduated levy when revenue is over $100,000.
“Over the counter” traders will be charged $1000 and a levy based on the number of staff in engaged in trading activities.
|Financial advice|| A fixed levy of $1500 will apply for licensees in the financial advice sector.
There will also be a graduated levy based on the number of advisers a business has on the Financial Advice Register.
For a full list of the business types and sectors and how the levies will be calculated, click here.