ASIC could be self-funding but advisers, accountants pay and pay
The Government should pay for actions initiated by the Australian Securities and Investments Commission (ASIC) in the public interest, not the population it regulates such as advisers and accountants.
What is more, the effectiveness and relevance of the recently-upgraded ASIC breach reporting regime has been brought into question with only 1.8% of issues raised in breach notices going forward to prompt further ASIC investigation.
Those are two of the bottom lines of the Chartered Accountants ANZ submission on ASIC enforcement capability filed with the Senate Economics Committee with the big accounting body pointing to just how inappropriate it is that accountants and advisers pay multiple times for enforcement actions initiated by regulator.
“Where ASIC has sought for more work to be undertaken for a matter they are investigating in the public interest, we consider it unreasonable that only ASIC’s regulated population fund such actions,” it said.
“Instead, ASIC actions for the public benefit should be funded by the public, Australia’s 14.7 million individual taxpayers or the 2.6 million businesses that pay tax. The costs of such actions should not be recovered solely from the, approximately, 82,000 entities and licenced professionals that make up ASIC’s regulated population.”
“Currently, ASIC’s regulated population pay multiple times for enforcement actions undertaken by ASIC. They pay fees for their licence, apply their resources to undertake investigations on behalf of ASIC, and then, through the annual cost recovery levy, pay ASIC’s costs. Yet this population have no say in ASIC’s activities and no visibility over the outcomes achieved.”
“Further, if a Court awards penalties as a result of such enforcement action, these penalties are paid into consolidated revenue. For example, in the financial year 2021-22 ASIC raised $1,676 million for the Commonwealth in fees, charges and supervisory costs.
“This indicates ASIC could be self-funding and still contribute significantly to consolidated revenue. We recommend that policy settings are amended so that investigations undertaken for the broader public benefit are funded by all taxpayers, not only those regulated by ASIC.”
“We also recommend that income ASIC receives from penalties awarded as a result of enforcement action be offset against the costs of those enforcement actions and, where income exceeds costs, the excess returned to general appropriations,” the submission said.
On the question of the breach reporting regime, the CA-ANZ submission that of the 3,767 initial statutory reports ASIC received in 2021-22, just 66 or 1.8% progressed to ASIC specialist teams for further investigation.
“For example, in the financial year 2021-22 ASIC raised $1,676 million for the Commonwealth in fees, charges and supervisory costs”. So $1.7b into consolidated revenue…Maybe the Opposition Treasurer MP Stuart Robert would care to explain…
Would you get an answer from Slippery Stuie ?
ASIC and the mad breach reporting regime is a prime example of a compromised organisation.
It’s current reluctance is release the report regarding the behaviour of a current commissioner, the inability of a previous commissioner to determine what was acceptable behaviour and it’s failure to act in the face of repeated requests regarding the practices of corporate rogues confirms ASIC is defective.
We have had two ASIC commissioners caught stealing tax payers money but they found no wrong doing just pay back the money. Now we have a third commissioner being investigated bet she has been caught too but that will make ASIC look too bad so they try and bury the investigation.
The fish rots from the head. “heads on sticks to get bigger bonuses”
ASIC staff need to go and complete a ethics course before they can be employed again.
ASIC / Govt promised costs paid from legal case wins would offset Adviser funding ???
Where are our legal cost recovered???
Besides legal costs recovered, Govt & ASIC should pay us our 50% of our Litigation Funding return. That’s standard reward in that area.
Pay up Govt & ASIC.
I have argued this many times, even though the industry (big banks at the time) wanted a ‘user pays’ model – which means those with market dominance can continue to set prices while users (small advisers such as us) gets screwed in the process. There’s no basis why ASIC needs to extract rent from the market when they are already paid by the Government via monetary operations between Treasury and RBA (keystrokes on the computer and they get paid via their bank accounts).
Josh Frydenberg and his then chief of staff, Martin Codina (now working for CFS), really designed the new taxes (ASIC levy) in a manner to decimate the advice industry. It’s almost as if that was their purpose.
I wonder if Martin Codina’s former work at FSC had anything to do with that?
During the Hayne Royal Commission it was another CFS employee (Linda Elkins) who was intrumental in throwing advisers under the bus in an attempt to deflect attention from the wrongdoing of product companies. She has since left, but one wonders if Codina was recruited by CFS to carry on the deflection campaign against advisers.
It’s disgusting and an international joke. Death by regulation then attack the profession to find litigation then keep the proceeds. Why need a report into the cost of advice. We should be self regulated and ASIC shut down.
Some years ago I turned away a client. At the time I thought my fees were too high for them. They returned to me recently seeking assistance after being scammed by an Australian registered company. A quick call to ASIC was greeted with a curt “whatta you want us to do”…..I was furious, angry that they ASIC were clear contributors to the cost of advice, forcing people into the hands of crimiminals too busy chasing advisers for spelling mistakes in advice documents. I am left with no doubt that ASIC are corrupt. How else do you explain an inability to renew an advice fee on Monday with a client sitting across from you, because the anniversary date falls on Tuesday.
Well done Chartered Accountants ANZ, great to see a sensible submission with well articulated arguments and substantive figures and logic by a professional assoc.