Assistant Treasurer Josh Frydenberg has released a consultation paper, indicating that it forms part of the government’s consideration of the recommendation made by the FSI that called for ASIC’s regulatory activities be funded by industry.
“The Murray Inquiry observed that an industry funding model would provide more funding certainty for ASIC and enhance the transparency of ASIC’s costs and operations,” Mr Frydenberg said.
“An industry funding model for ASIC would: ensure that the costs of the regulatory activities undertaken by ASIC are borne by those creating the need for regulation (rather than all taxpayers); establish price signals to drive economic efficiencies in the way resources are allocated in ASIC; and increase ASIC’s accountability to its stakeholders.
“The government is committed to broad consultation with the community on the potential introduction of industry funding for ASIC, before making any decision.
“I encourage all stakeholders who have an interest in the efficient operation of ASIC to participate in this consultation process,” Mr Frydenberg said.
Commenting on the consultation paper, ASIC chairman Greg Medcraft said: “An industry funding model is about ensuring that those industries [which] need the most regulation should pay for it, rather than taxpayers.
“It is about establishing a price signal for regulation which we think will drive economic efficiencies in the way resources are allocated in ASIC.
“An industry funding model will also improve ASIC’s transparency and accountability. That means business will better understand the job we do by having greater visibility of the cost of doing that job,” Mr Medcraft said.
The Financial Services Council (FSC) has also come out in support of the discussion paper.
FSC chief executive Sally Loane said: “The FSC supports a model where ASIC can be provided with a stable level of funding which is consistent with its projected workload and so it can operate effectively under its mandate as a regulator.
“We have enough laws in place already to ensure consumers are protected. ASIC needs to focus on its role as a corporate regulator to enforce these laws and it needs to be properly resourced to do its job.”
The FSC’s submission to the Financial System Inquiry supports an industry funded model for ASIC, stronger external accountability mechanisms and a clearer mandate for ASIC, an FSC-issued statement said.
The closing date for submissions is 9 October 2015.
