The devil will be in the detail of the Government’s moves to increase the Financial Services levy to pay for increased funding of the Australian Securities and Investments Commission (ASIC) and Australia’s two key superannuation industry bodies want to see that detail.
Both the Association of Superannuation Funds of Australia (ASFA) and the Australian Institute of Superannuation Trustees (AIST) have asked for transparency around not only the increased funding to ASIC via the levy but via the proposed user-pays model.
AIST chief executive, Tom Garcia said his organisation agreed with the findings of the Financial System Inquiry (FSI) that ASIC’s costs were not transparent to participants in the financial services sector.
He said there was a risk that the additional funding would prove ineffective because there would not be commensurate increases in the level of transparency and accountability around ASIC’s activities.
“We agree with the findings of the Financial System Inquiry, that ASIC’s costs are not transparent to participants in the financial services sector,” Mr Garcia said.
“However we must ensure the funding of ASIC is not built up as a solution to all problems facing the financial sector — there are still systemic problems that have to be dealt with that are outside the regulator’s brief.”
Noting that the Government will be introducing a user-pays funding model for ASIC Mr Garcia reiterated calls for a ‘Cost Recovery Impact Statement’ (CRIS) — in line with the Government’s own Cost Recovery Guidelines.
“A better understanding of the basis for ASIC’s costs and how these are spread across the range of activities that ASIC needs to perform would go a long way to improving the public’s trust in the financial services sector,” said Mr Garcia.
“The publication of a CRIS — coupled with implementation of the Regulator Performance Framework issued last year, would greatly assist with how ASIC’s resources are focused.”
ASFA chief executive, Paul Vamos said her organisation supported adequate and appropriate funding for ASIC, and considered that all regulated industries should contribute to that funding via levies but pointed to previously expressed concerns around a lack of transparency and accountability inherent in the process around how levies were applied an utilised.
“With this in mind, ASFA welcomes the deferral of the industry funding model until 2017, and looks forward to engaging with the government on the details of the funding model.”
