ASIC funding model needs transparency
The Australian Institute of Superannuation Trustees (AIST) has treaded with caution on the proposed industry funding model for the corporate regulator, calling for a cost recovery impact statement (CIPR) for regulated entities to assess how the funding would be used.
In a submission to the Treasury, the AIST said it was concerned about the transparency and accountability of the model in the ‘Proposed Industry Funding Model for the Australian Securities and Investments Commission Consultation Paper', adding the current review process lacked a holistic approach.
The submission said no revisions to the funding model should occur until a CIPR that was in line with the Cost Recovery Guideline requirements was drafted, and implementation and public reporting of the new Regulator Performance Framework had commenced.
"This will provide transparency regarding program areas and the evaluation of performance, giving a better basis to assess resourcing needs," the submission said.
The AIST also said levy mechanisms proposed for financial advice providers did not differentiate between providers who operated via private banking operations who dealt with hundreds of thousands of dollars at a time, and those who were dealing with tens of thousands of dollars if the firms had the same number of advisers.
"For these reasons, we believe that a risk-weighting overlay such as that present in a graduated approach to levy calculation should be considered to ensure that operations pay an amount that appropriately reflects the risk to stakeholders as individuals as well as the financial system in its entirety," it said.
The submission also lamented the fact that the proposal was running simultaneously with the review by Treasury into the corporate regulator's capability, and not long after the Regulator Performance Framework.
"The undertaking of these reviews separately represents a missed opportunity, where optimal results would have been obtained from running all these at the same time," the submission said.
Recommended for you
Government has introduced a bill to Parliament to legislate the first stream of the QAR reforms.
ASIC now has a 1:1 ratio when it comes to court success in the enforcement of crypto activities and more action is expected as Treasury seeks to introduce a regulatory framework.
A leading governance body has hit out at “specialist interest groups proposing ad hoc law reform” when it comes to reforms of financial services legislation and believes an independent body is needed.
The release of ALRC’s final report into financial services legislation has highlighted financial advice as a “significant” focus as it seeks to reduce costs and help advisers understand their obligations, alongside the Quality of Advice Review.
