Announcing the consultation paper this morning, Assistant Treasurer Josh Frydenberg said 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,” he said.
“I encourage all stakeholders who have an interest in the efficient operation of ASIC to participate in this consultation process.”
The closing date for submissions is 9 October 2015.
It would be very tempting for ASIC to start investigations with no merit just to get the funding up by cost recovery
Now there’s a conflict to beet all conflicts. To quote ASIC, how will that conflict be managed
And then no doubt the cost of all the investigations from giving bad dodgy risk advice will then be laid at the feet of the ifa to cop. Hasn’t stopped them before!
Would this come in the form of an annual government levy like the fofa one?
So the footy clubs are going to sponsor the referees?!?
According to the Fin Review, the banks are against it. But Freydenberg has been very good to them recently , so they might accept it after a few modifications just to let the Govt appear to be tough.
OTOH, there will be few advice based investigations soon because the banks plan to replace Personal Advice with GENERAL ADVICE
All ASIC will demand is that bank insurance advice clients are given an oral warning about GENERAL ADVICE
Sounds like a really good idea. Lets make providing risk advice a loss making operation whilst implementing a 3 year clawback period and also make you guys fund ASIC.
I am not sure why anyone would not be flocking to the industry.
What a great idea. Put more costs on the advice businesses and let the big instos ( ie banks and industry funds ) market directly to clients and give them exemptions from the advice regulations. They will then argue that they don’t need to contribute because they are exempt. The lack of insight into how the big instos are playing the whole industry is staggering.
This is a very good idea, and ASIC might start with the banks whose financial services arms have been ripping off clients. Investigation of them, surveillance of their activities, and other costs associated with forcing banks to pay clients compensation should be paid by the banks. Let there not be a carve out from this rorters pay model. You can be sure the banks’ strong lobby in Canberra will aim to have them excluded from rorter pays.
One more cost that will ultimately be borne by us, the advisers…
By it’s own legislated laws, the government must consider the “client considerations” first criteria. If ASIC is to be funded by the industry then it must serve that industry as its client first and foremost. This would be a radical departure from ASIC’s current position as an instrument of public financial regulation and protection.
Fantastic, so we may be funding the already “out of touch” ASIC scrutinise our advice processes which are so far over-stretched into the world of compliance.. Times are good in the world of advice!