In a question on notice, Liberal senator Slade Brockman asked ASIC to clarify its previous statements to Parliament that costs will be credited to the relevant subsector of the industry that has had to pay for historic cases if the regulator is successful in court.
“Can you please advise what proportion of the fully allocated costs that are charged to financial advisers as a result of enforcement/court action would typically be recovered through a court award of expenses?” Senator Brockman asked.
“In the event that ASIC is successful in a court action and penalties are awarded, do these penalties reduce the ASIC funding levy or do they go into consolidated revenue?”
The regulator said that its enforcement activity “may consist of hundreds of matters in progress at any one time”.
“Not all enforcement matters result in litigation and not all litigation results in an award of costs in ASIC’s favour,” the regulator said.
“Where costs are awarded and able to be collected by ASIC, the costs recovered from industry are reduced.”
Rather than directly refunding the relevant subsector, the regulator’s comments suggested that any costs awarded in a case would offset its general enforcement expenses.
ASIC pointed to its cost recovery implementation statement (CRIS) for the 2019-20 year, where there had been a small offset for $4 million in costs awarded through litigation.
“[Cost reduction] is disclosed in ASIC’s CRIS and our annual dashboard report as ‘costs funded by own-source revenue’,” the regulator said.
“ASIC’s 2019-20 dashboard report shows that ASIC’s total enforcement costs were $86.3 million and costs funded by own-source revenue was $4.6 million.”
ASIC also clarified that penalties awarded in court cases went to consolidated revenue rather than offsetting industry supervisory costs.
“As a matter of law, penalties go directly to the Commonwealth Consolidated Revenue Fund. Penalties are imposed as a deterrent and bear no relationship to ASIC’s regulatory costs,” the regulator said.
ASIC is corrupt.
Look at how hypocritical and criminally negligent they are regarding their own Crennan & Shipton.
You know when ASIC are lying by either their lips moving or they write something.
Does ASIC ever have a solvency issue? And if not, why do they need our levies?
a lawyers picnic with absolutely no accountability – the model definition of a concept of unjust enrichment
How else do you think ASIC funds all the pay increases and bonuses they paid themselves in the middle of a Pandemic. They basically closed their shop last year and still paid themselves (with pay rises & bonuses), while small business’s fail.
Anyone have any idea how much red tape costs the economy?
Now just replace ‘financial services licensee’ with “ASIC” and be creative with word replacement!
912A(1) A financial services licensee must:
(a) do all things necessary to ensure that the financial services covered by the licence are provided efficiently, honestly and fairly; and
(aa) have in place adequate arrangements for the management of conflicts of interest that may arise wholly, or partially, in relation to activities undertaken ………
(e) maintain the competence to provide those financial services; and
(f) ensure that its representatives are adequately trained (including by complying with section 921D), and are competent, to provide those financial services;
etc,etc,etc…….
Talk about fee for no service!!
Advisers pay for all the court cases, and the government receives all the proceeds of fines and penalties.
A win/win for the government and ASIC. A lose/lose for all financial advisers.
Expect ASIC to launch many more court cases; they don’t have to pay for them, but get the benefit if they win.
The federal Liberal government embrace Big Government and red-tape.
ASIC Financial Planning Pty Ltd
All revenue with no costs (but if any costs arise we get other planners to pay them)…
Good model what do you think planners?
Totally unfair,immoral,and wrong.
I agree, it is the immorality of this that offends me the most
That is 5% cost recovery. Yay!
Let’s have an icecream sandwich.
Don’t they realise that they are going to leave the well dry? Penalties need to be used to fund ASIC’s costs.
“Walks back”? Does that equal “Lied about?”
The Hayne royal commission’s report described ASIC as a weak watchdog… I really wish they had of added [b]incompetent[/b][u][/u] to the list.
They seriously are the Organisation equivalent of a participation award.
Just checked my diary to make sure this wasn’t 1st April. Why am I not surprised that advisers will get absolutely no relief what ever form these outrageous imposts?
I don’t trust them at all. Look through what they spend money on it’s a massive gravy train like many of these government organisations become. The Parliamentary scrutiny is not enough.
Sounds like a good business to own. Costs are covered by someone else and you keep all your revenue. How do I get on that gravy train!
Unbelievable….oh hang on, no it isnt. FA industry is the gift that keeps on giving…..to ASIC.