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Industry funds back ‘user-pays’ ASIC

Industry funds back ‘user-pays’ ASIC

Taylee Lewis
— 1 minute read

Industry Super Australia (ISA) has come out in support of shifting funding for ASIC to a user-pays model, but only on the basis that industry and retail funds pay different levies.

ISA has voiced its support for the funding model on the condition that levies are tiered to reflect risk profiles and required levels of supervision, a statement issued by the organisation said.

The federal government’s consultation paper currently proposes tiered levies for super funds depending on their size (based on the amount of funds under management) whether for-profit or not-for-profit, the statement said.

However, ISA chief executive David Whiteley argued that industry funds should not have to pay the same levies as retail funds. 

“The new funding model should distinguish business models which give rise to greater risks to investors and consumers and require greater attention from the regulator," he said. 

“Any risk assessment must surely recognise the succession of scandals involving the bank-owned and retail wealth sector, which continues to receive commissions and other forms of conflicted remuneration. Any user-pays levies should reflect this,” Mr Whiteley said.

AIST chief executive Tom Garcia said that while AIST supports additional funding for ASIC, the organisation has concerns regarding the transparency of the new funding model.

“AIST supports an industry funding model that is consistent with the OECD regulator funding principles, especially for the risk-weighting of industry participants to be accurately reflected in the funding allocation.

“Consistent with the cost recovery guideline requirements, a published cost recovery impact statement (CRIS) regarding ASIC funding is a fundamental pre-condition for transparency and accountability,” Mr Garcia said.

Mr Garcia said AIST is concerned the current review process lacks a "holistic approach". 

The Governance Institute had previously criticised the new model, indicating that the government has taken a mistaken "one-size-fits-all" approach.

 

Industry funds back ‘user-pays’ ASIC
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