10Meaning of regulatory costs

#### 10 Meaning of regulatory costs (1) ASIC’s regulatory costs for a financial year means the amount determined in an instrument under subsection (2) for the financial year. (2) ASIC must, by legislative instrument, make a determination: (a) specifying the amount of its regulatory costs for a financial year; and (b) specifying the extent to which those costs are attributable to each sub‑sector. Limit on amount of regulatory costs (3) The amount determined by ASIC under paragraph (2)(a) must not exceed the sum of all amounts appropriated by the Parliament for the purposes of ASIC for the financial year. Amounts that ASIC must not include (4) In determining an amount for a financial year under paragraph (2)(a), ASIC must not include the following amounts: (a) amounts relating directly to the regulation of persons and entities that are not leviable entities; (b) costs giving rise to amounts debited from a special account established under paragraph 78(1)(a) of the Public Governance, Performance and Accountability Act 2013; (c) amounts prescribed by the regulations for the purposes of this paragraph. Amounts that ASIC may include (5) In determining an amount for a financial year under paragraph (2)(a), ASIC may, subject to subsection (4), include the following amounts: (a) costs relating directly or indirectly to the regulation of leviable entities; (b) without limiting paragraph (a), costs relating to the following: (i) surveillance; (ii) education; (iii) guidance; (iv) engagement with industry; (v) policy advice; (c) the total of all amounts that, in the financial year, are debited against an appropriation and credited to a special account of the kind referred to in paragraph (4)(b) (even if the debits from the special account in the financial year fall short of the amount of those credits); (d) depreciation of capital costs, whether the costs were incurred before, on or after the commencement of this Act; (e) amounts prescribed by the regulations for the purposes of this paragraph. > Note: An Appropriation Act provides for amounts to be credited to a special account if any of the purposes of the account is a purpose that is covered by an item in the Appropriation Act. Adjustment for under or over collection in prior year (6) If the amount of levy collected in relation to a financial year falls short of, or exceeds, the amount of ASIC’s regulatory costs for the financial year, ASIC must, in making an instrument under subsection (2): (a) for an excess of collected levy—reduce the amount of its regulatory costs for the following financial year by the amount of the excess; or (b) for a shortfall of collected levy—increase the amount of its regulatory costs for the following financial year by the amount of the shortfall, to the extent the shortfall does not arise because of section 15 of the ASIC Supervisory Cost Recovery Levy (Collection) Act 2017 (about waiver of levy payable). Attributing regulatory costs to sub‑sectors (7) In determining, for the purposes of paragraph (2)(b), the extent to which regulatory costs for a financial year are attributable to a sub‑sector, ASIC must have regard to the following principles: (a) costs relating to the direct regulation of leviable entities in particular sub‑sectors are attributed to that sub‑sector; (b) costs relating indirectly to the regulation of leviable entities are attributed to each sub‑sector in proportion to the regulatory resources dedicated to that sub‑sector; (c) an excess or shortfall that creates an adjustment under subsection (6) is attributable to the sub‑sector in which the excess or shortfall arose; (d) amounts credited to a special account as referred to in paragraph (5)(c) are to be attributed, over time and in a reasonable manner, to the sub‑sectors to which the costs giving rise to debits to the special account relate. Retrospective application of instruments (8) Subsection 12(2) (retrospective application of legislative instruments) of the Legislation Act 2003 does not apply in relation to the following: (a) regulations made for the purposes of paragraph (4)(c) or (5)(e); (b) a legislative instrument made for the purposes of subsection (2).