In the submission, we proposed a new process with the aim of providing certainty of the annual levy to be recovered from the Australian Securities and Investments Commission’s (ASIC) regulated population. We consider certainty paramount as the majority of ASIC’s regulated population are small businesses and individual professionals who work in small businesses.

The new process proposes replacing the current Cost Recovery Implementation Statement (CRIS) for feedback with a CRIS for budgeting. The CRIS for budgeting is to be released in the first month of a new financial year and the final CRIS to be released at the same time as the Annual Dashboard. The final CRIS to contain actual costs incurred by sub-sector and the final levy is to be not more than 10 per cent of the budgeted levy. A surplus or shortfall in a sub-sector is to then be adjusted for in the subsequent financial year.

We also propose changes to the content of a CRIS, primarily, for explicit explanations when actual costs exceed budgeted costs by more than 10 per cent. We recommend that information that can be found in another public forum, such as ASIC’s website, be referred to and a link provided in the CRIS rather than repeated in full. We also seek a review of the metric for registered liquidators and, until such a review is undertaken, recommend the removal of some notifiable events.

This process builds on the premise that ASIC only expends the funds allocated to them in the budget in May of each year. Material variances occur at the sub-sector level driven primarily by unknown enforcement costs. We acknowledge that ASIC considers it cannot budget for enforcement costs by sub-sector as it responds to issues as they arise in a financial period. Material variances occur when an unexpected issue arises in one sub-sector and ASIC resources are redirected from a planned activity to focus on that issue. Our process seeks to provide certainty to ASIC’s population by moving the recovery of costs from a sub-sector that are materially different to budgeted costs for a financial period to the subsequent financial period.

In addition to a new process, we ask the Government to recognise that many activities undertaken by ASIC are not related to its regulated population, such as activities related to ‘buy now pay later schemes’, and many activities benefit the general population not just ASIC’s regulated population. Accordingly, we call for such activities to be quarantined and costs recovered equally from the public and ASIC’s regulated population. We also recommend that, when the Government determines mid a financial period to loan ASIC funds to undertake a specific activity, the Government allows ASIC to recover those funds from the relevant sub-sector over several years. Small businesses and individual professionals cannot absorb unexpected significant increases to their operating costs within a single financial period.

Finally, we recommend that annual consultations on the CRIS cease and be replaced with biannual consultations by Treasury similar to the process behind this consultation. Annual consultations by ASIC simply incur costs and do not affect change. We trust this current consultation will seek to make changes that benefit ASIC’s regulated population and increase transparency and also instigate measures to hold ASIC accountable for their activities.