ASIC,

  • ASIC Fees to Increase for Australian Financial Services (AFS) Licensees

    Legislation was passed in June 2018 which resulted in ASIC’s fees reflecting the cost associated with the work undertaken by them. While around 90% of ASIC’s regulatory activities will be now be recovered in the form of industry funding levies, the remaining 10% will be recovered via fees for service.

    We have noted when assisting AFSLs with their FS70 lodgement that no lodgement fees were payable because of this new regime. As all lodgements are now completed online this is logical given that the marginal cost to ASIC would be minimal.

    Process for Payment of Levies

    Each year, regulated entities will be required to provide ASIC with metrics for the previous financial year through the ASIC Regulatory Portal. ASIC will use this data to calculate each entity's share of the 2017–18 regulatory costs. They will issue industry funding invoices (the funding levies) for the 2017–18 financial year in January 2019.

    Will costs Increase?

    In terms of fees for service for AFSLs, the indication is that some regulatory fees will increase. For example, registering a company as an AFSL used to incur a fee of $1,643. The new fees range from $2,233 for an application online for low complexity products in the wholesale space, up to $7,537 for high complexity products with retail clients. Paper lodgements are more expensive again.

    ASIC should be releasing information on annual levies this month. In March 2018 they released “indicative levies” which included the following for AFSLs.

     

    Sector

    No in Industry

    Levy Basis

    Indicative levy

    Retail clients/relevant products

    2953

    No of advisers

    $1,500

    Retail clients/non-relevant products

    660

    No of days authorised

    $719

    General advice only

    983

    Flat levy

    $2,058

    Personal advice/wholesale only

    1466

    Flat levy

    $596

    More clarity on these levies should be published by ASIC shortly.

    For more information please contact one of the team from SAAS Audit.

  • Vice is tightening on SMSF auditors

    With ASIC having an online register of all registered SMSF auditors as well as a list of those suspended, pressure is on for auditors within the industry to make sure all superannuation laws, regulations and codes of practice are carried out precisely.

    ATO is currently working with the Tax Practitioners’ Board (TPB) and ASIC to establish clear boundaries and are looking at the various threats to independence as outlined below.

    Reporting an irregularity within a company fund, especially if this is an auditor’s only or largest client puts the auditor in an invidious position – by obeying the law he could also be putting himself out of work. The same dilemma is placed on an auditor who obtains referrals from a large client. Reporting an irregularity in that client’s fund is likely to cause the cash cow of referrals to dry up.

    Close personal relationships with the trustees, the accounting team or members of the fund being audited calls independence into question, particularly if it is a family or business relationship. This also holds true for staff who have left a company to begin their own practice then go back to perform an auditing function - reporting former colleagues just doesn’t seem “cricket”.

Our Services