Smaller funds stand to bear a disproportionately high burden as a result of the levy intended to fund the Australian Securities and Investments Commission (ASIC), according to the Association of Superannuation Funds of Australia (ASFA).
In a submission to Treasury on the new levy arrangements, ASFA warned on the burden which would need to be carried by the smaller funds as a result of “minimum levy’ arrangements.
“Smaller funds will bear a disproportionately high burden due to the minimum levy on trustees,” it said and suggested that insufficient evidence had been produced to determine whether the minimum levy arrangements would ultimately prove to be appropriate.
“ASFA acknowledges that there is a fixed cost of regulating trustees,” the submission said. “However, there is not sufficient information (in the Proposals Paper or elsewhere) to determine whether the minimum levy is appropriate.”
It said the Treasury Proposals Paper suggested that total annual levies with respect to the regulation of superannuation trustees would be in the order of $8.5 million.
The submission said many funds would be subject to levies in addition to the trustee levy.
“Operators of investor directed portfolio services (IDPS) will be subject to a levy, irrespective of the trustee levy, and providers of financial advice services also will attract levies,” it said. “With respect to the former, double counting of regulatory effort could occur where different authorisations apply to the same pool of assets.”
It said that on this basis, ASIC should look to refine its methodology after the funding model had been implemented, suggesting a review take place after one year.
