Licensees to cough up $1,000 each to fund watchdog’s operations
The Mortgage and Finance Association of Australia (MFAA) has called for a “balanced and proportionate” approach to funding levies applied to credit intermediaries (including brokerages), after the Australian Securities and Investments Commission (ASIC) revealed that the levy will more than double in the 2024–25 financial year.
According to ASIC’s latest Cost Recovery Implementation Statement (CRIS), the total levy for the credit intermediary sector is forecast to rise from $2.9 million in 2023–24 to $6.05 million in 2024–25.
The minimum levy will be $1,000 per brokerage, plus $43 for each credit representative. This substantial increase reflects a renewed focus on regulatory oversight and enforcement in the mortgage broking sector.
MFAA executive, policy and legal, Naveen Ahluwalia (pictured) said: “ASIC is performing its valuable role in monitoring the sector, and we acknowledge that. However, the costs associated with this activity need to be balanced and proportionate, ensuring they properly reflect an industry that continues to deliver strong results.”
Ahluwalia stressed that the broking industry is achieving excellent outcomes for consumers, with brokers’ market share reaching record highs while consumer complaints remain very low. She added that under the current industry funding framework, the sector contributes to funding ASIC’s surveillance, investigation, and enforcement activity, yet does not benefit from any penalties recovered through enforcement proceedings.
“This is something we raised, including in our submissions to Treasury’s review of the ASIC funding model,” Ahluwalia said. “Looking ahead, the MFAA and ASIC are in regular dialogue and we welcome the opportunity to work with ASIC on the outcomes of its monitoring activity.
Read more: What's the purpose of Australia's broker associations?
The CRIS outlines the regulator’s approach to recovering the costs of its regulatory activities directly from industry participants. Under this industry funding model, introduced in 2016, ASIC’s regulatory costs are allocated to different sectors via annual levies and fees, ensuring that those entities which require closer supervision contribute proportionately to ASIC’s operating expenses.
ASIC’s estimated levies are published to help entities plan and budget for upcoming regulatory costs.
