ASIC should refund licensees in some circumstances

The industry funding model for the Australian Securities and Investments Commission (ASIC) should also carry with it an obligation on the regulator to refund monies to licensees in particular circumstances, according to the Association of Superannuation Funds of Australia (ASFA).

In a submission responding to a Treasury consultation paper on the proposed industry funding model for ASIC, ASFA has made clear it believes there are circumstances where the regulator should be required to hand back money to licensees, particularly with respect to class order relief applications.

The superannuation funds body said it considered that where ASIC provided general relief from regulatory requirements via a class order after it had provided relief from those requirements to licensees in response to specific applications for relief, the fees paid by those licensees should be refunded.

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In doing so, ASFA pointed to past experience with ASIC around the implementation of the Stronger Super changes.

“The experience of some fund trustees during the implementation of the Stronger Super reforms highlights the need for such an arrangement,” it said. “A number of trustees enquired of ASIC about the likelihood of class order relief being provided – to ameliorate particular impacts or to defer certain commencement dates.”

“We understand that in many of these cases the trustees concerned were informed that no general class order relief would be forthcoming and that they would need to make a specific application for relief. However, in several instances, ASIC ultimately issued class order relief with general application to all affected trustees.”

The ASFA submission argued that the positions adopted in those class orders had been informed by the work undertaken by ASIC to respond to the earlier specific relief applications and that “those trustees that did not make specific relief applications effectively received a benefit that was funded by the trustees that did make such applications”.

“In effect, the current model penalises licensees that take early, proactive action,” it said. “In ASFA’s view, this is inequitable and should be remedied, via the refund of any fee paid for a specific relief application which falls within the terms of any subsequent general class order relief.”

It said the cost attributable to developing the class order should then be recouped as part of the levy imposed on the industry sectors or sub‐sectors to which it applies.

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