iscover
iscover 
Under the Corporations (Fees) Amendment (ASIC Fees) Act 2018, the federal government will be able to recover the cost of ASIC’s regulatory activities directly from industry participants through fees and levies adjusted to reflect the financial regulator’s actual costs.
Amendments to the original legislation include the ability to prescribe different fees based on the complexity of the chargeable matters being investigated, which ASIC will have the discretion to categorise as low, medium or high.
The new fees-for-service regime includes higher caps on fees that can be prescribed by ASIC on chargeable matters, which include the lodgement, processing, inspection and production of documents under the Corporations Act 2001.
For example, in sections 6(1)(a) and 6(3) of the amended legislation, the maximum fee that can be prescribed for a chargeable matter has been increased from $10,000 to $200,000, while the total sum of fees for a chargeable matter has been capped at $300,000, compared to the previous $50,000.
In introducing the draft legislation, Minister for Revenue and Financial Services Kelly O’Dwyer said: “An industry funding model is a critical component of the government’s reforms to strengthen ASIC and better protect Australian consumers. Industry funding ensures that the costs of regulation are borne by those that have created the need for it, rather than the Australian public.
“These proposed amendments allow ASIC to better align its fees, by enabling ASIC to charge a cost-reflective fee for the services it provides for a specific entity.”
The government is accepting feedback on the draft legislation until 24 April 2018.
The changing role of ASIC
In its draft report on competition in Australia’s financial system, the Productivity Commission argued for comprehensive reform of the regulatory environment, proposing that ASIC play the role of “champion of competition” within the financial system.
At present, the Australian Competition and Consumer Commission (ACCC) is the chief regulator when it comes to competition in Australia. However, the PC said that the ACCC is “not a counterweight to the financial regulator’s interests in stability”.
“The ACCC’s primary power lies in responding to evidence of a substantial lessening of competition in a market. It does not extend to knowing in advance of a financial regulator’s proposed actions or reviewing the competition consequences of such actions,” the PC report stated.
Therefore, there is no agency tasked with “monitoring and enhancing competition and hence supporting innovation in the financial system”.
In ASIC’s post-draft submission to the PC’s inquiry, the regulator acknowledged that a broad mandate would allow competition to be factored into its regulatory decision making, as well as provide the capability to “address market failure as a driver of misconduct or poor consumer outcomes”.
However, ASIC remained resistant to the idea of regulating competition in the financial services industry.
“Having a broad competition mandate — to ensure we can appropriately incorporate competition considerations into our existing role as a market conduct regulator — would not make ASIC a competition regulator,” the submission report said.
“We would not have a role in enforcing competition laws – for example, regulating corporate transactions from a competition perspective or monopolies, bringing abuse of market power cases, or regulating pricing and access regimes.”
The regulator additionally expressed its support for the cooperation of different regulators in tackling competition issues, but it pointed out that each regulator had its own specific area of expertise and “therefore best placed to assess how competition should be weighed and balanced within its area”.
Earlier this year, ASIC was freed from the legal obligations outlined in the Public Service Act 1999 around pay and workplace entitlements for government employees.
Ms O’Dwyer said in March that the changes would give ASIC “greater operational flexibility” and bring the financial regulator in line with the Australian Prudential Regulation Authority and the Reserve Bank of Australia.
“Ultimately, it is competition — not regulation — that is the best means of ensuring that consumers and investors get value for money in financial products and services. Both consumers and financial product and service providers — particularly new entrants — benefit from a more competitive financial system,” Ms O’Dwyer said at the time.
[Related: Treasury rejects ‘impractical’ call for competition champion]
ISCOVER 
