ASIC imposing new levies

ASIC is imposing significant new levies on all companies and the Financial Services Industry. Levies are in addition to what the industry already pays in taxes, levies, fees, charges and compliance costs, which we understand will not be reduced.

ASIC is wasting no time, levies will be issued for the 2017 - 2018 financial year commencing on 1 July 2017, only 15 days after the enabling law was passed.

ASIC has given little detail at this time. It has said the levies will cover costs from financial year 2017 / 2018 and from prior financial years. Levies will affect all sectors. It has not said how much will be raised in total. LNP hopes this will be disclosed quickly, for the sake of transparency.

Here is a limited summary of how ASIC has said certain sectors will be hit.

Listed companies will pay a minimum $4,000, plus a graduated fee if market capitalisation over $5 million. Responsible entities will be levied a minimum of $7,000, and a graduated levy if assets are over $10 million. Pension trustees will be levied a minimum of $18,000, and a graduated levy if assets are over $250 million. IDPS providers will be levied a minimum of $10,000, and a graduated levy.

Small proprietary companies will be hit with flat fees which are more than now. Large proprietary companies will be hit by a new flat fee on top of what they pay now and this will be higher than for small proprietary companies.

Flat fees will be applied to AFS licensees who are; Custodians, Trustees, MDA providers, Margin lenders, OTC derivative providers, General advice providers, Payment product providers (moving to graduated). The fees have not been disclosed.

AFSL holders who provide advice on products, basically financial planners, will be levied based on the number of advisers with a minimum fee of $1,500.

Australian Market License holders, and exchange providers will pay a minimum of $9,000, plus a graduated levy based on transaction volumes.

Crowd funders P2P lenders etc, have not been specifically hit at this time, but the government is finalising arrangements to do so.

Insurance product providers with AFSL's will be hit with a minimum fee of $20,000 plus fees based on net premiums. Insurance and risk management product distributors will pay a flat fee.

Corporate advisors will pay $1,000 plus a graduated levy if revenues are over $100,000.

 Auditors of disclosing entities will be charged based on revenue, a turnover tax, not taking account of industry sectors where the auditor operates. Registered company auditors will also be individually hit with flat fees. This is a further impost on an industry that has very high and increasing compliance costs as a result of significant existing regulatory compliance requirements. It will lead to increased audit fees.

The various graduated levies based on assets under management are similar to unpopular bank deposit taxes, and will directly reduce returns to investors, even though on a smaller scale than the bank taxes.

This list is not designed to be exhaustive, but it does cover the majority of LNP Audit and Assurance's friends and clients. Please contact us if you want further details, at tonyr@lnpaudit.com, or www.lnpaudit.com