ASIC (Supervisory Cost Recovery Levy—Regulatory Costs) Instrument 2024/821

The central concept is "regulatory costs," defined in the Act and adopted by reference in section 4 of the instrument. Regulatory costs are ASIC's costs of performing its regulatory activities, subject to whatever deductions or adjustments the Act prescribes. The instrument sets those costs at $328,108,436 for 2023-24 (section 6). This figure is the numerator in the levy allocation process.

The denominator side is the sub-sector structure. Section 7 and the table in the instrument divide the regulated population into 47 named sub-sectors (items 1 through 48, with items 37 and several others absent from this instrument, and items 40, 44 and 45 set at zero dollars). Each sub-sector receives a cost attribution figure representing the share of ASIC's total regulatory costs that ASIC has determined is properly attributable to supervising that class of entity. The attributions across all sub-sectors sum to the total regulatory costs figure in section 6, consistent with the Act's requirement that costs be fully allocated.

Sub-sectors are defined in the Act and associated regulations, not in this instrument. The instrument's definitions section (section 4) incorporates those external definitions by reference, so any ambiguity about which entities fall within a sub-sector must be resolved by looking outward to the Act and its regulations, not inward to this instrument.

Two sub-sectors receive zero attributions in this instrument: item 40 (small securities exchange operators with self-listing function only) and item 45 (Tier 4 clearing and settlement facility operators). A zero attribution does not necessarily mean those entities pay nothing; it means ASIC has determined that no regulatory costs in 2023-24 are properly attributable to supervising those classes. The levy formula may still produce a minimal or nil liability depending on how the regulations interact with a zero cost pool.

The "applicable financial year" concept (section 5) confines the instrument's effect to 2023-24. A new determination must be made for each year. This year-by-year structure means that cost attributions can shift significantly between years as ASIC's spending patterns change, creating variable levy exposures that entities cannot reliably predict far in advance.

The instrument also imports the Act's disallowance provisions (noted under section 2): section 11 of the Act contains special rules about when disallowance operates and how it affects the instrument's date of effect, which is relevant because a disallowed instrument could remove the legal basis for levy assessments that have already issued.

Every entity that falls within one of the 47 sub-sectors listed in the table is affected, in the sense that the cost attribution figure for their sub-sector determines the pool from which their individual levy is drawn. The breadth is considerable. The sub-sectors collectively cover the great majority of ASIC-regulated financial services: listed corporations (item 22, $57.4 million), personal advice licensees for retail clients on relevant financial products (item 19, $45.0 million), credit providers (item 5, $31.3 million), responsible entities (item 32, $28.1 million), superannuation trustees (item 41, $26.4 million), large securities exchange participants (item 17, $19.1 million), retail over-the-counter derivatives issuers (item 33, $16.2 million), and large proprietary companies (item 15, $10.3 million) are the eight largest pools and together account for more than $212 million of the $328 million total.

At the other end of the scale, margin lenders (item 24, $4,517), exempt CS facility operators (item 9, $11,522), exempt market operators (item 10, $11,522), new specialised market operators (item 24A, $12,716), and operators of notified foreign passport funds (item 25A, $5,295) receive attributions that are negligible relative to the overall pool, implying that ASIC expends very little supervisory effort on these classes in this year.

Small and medium amount credit providers (item 36, $7.1 million) and registered liquidators (item 31, $7.5 million) carry notable attributions that reflect ASIC's enforcement-heavy posture in those sectors, particularly around consumer credit and insolvency practitioner oversight.

Entities not registered or licensed as of the relevant levy date do not appear in the table as individual obligors, but the sub-sector to which they would belong still carries a cost pool. New entrants in a sub-sector join a pool that is shared across all entities in that class, so the per-entity levy can fall if the sector grows or rise if it shrinks, independently of any change in the cost attribution.

The instrument itself imposes no direct duties on regulated entities. Its operative provisions (sections 5, 6, and 7) are directed at establishing facts (the applicable year, the total cost, and the sub-sector attributions) rather than at commanding conduct. Duties to pay the levy flow from the Act and the levy regulations, which use these facts as inputs.

The key right available under the legislative instrument framework is parliamentary disallowance. Section 11 of the Act contains special provisions for instruments of this kind, and the standard disallowance procedure under the Legislation Act 2003 also applies. Any senator or member may move to disallow the instrument within the applicable period following tabling. If disallowed, the instrument ceases to have effect, and the cost attribution for 2023-24 would be unresolved until a replacement instrument is made. Section 2(2) and the notes to that provision flag that subsections 11(3) and 11(4) of the Act deal specifically with the interaction between disallowance and the instrument's date of effect, meaning the Act has anticipated partial or full disallowance scenarios and prescribed how the timing rules operate in those cases.

Entities have no statutory right under this instrument to challenge the quantum of the cost attribution to their sub-sector. The instrument is a legislative instrument, not an administrative decision, so it is not subject to review under the Administrative Decisions (Judicial Review) Act 1977. Judicial review of legislative instruments is available only on limited constitutional or statutory construction grounds. This is a significant asymmetry: ASIC determines its own regulatory costs, attributes them to sub-sectors, and issues the levy assessments that flow from those attributions, with no merits-review avenue for the underlying cost figure or the attribution methodology.

Indirectly, entities can participate in the consultation process that precedes the instrument's making. The Act and associated policy frameworks anticipate that ASIC will consult industry on its cost recovery methodology, though the instrument itself records no obligation to do so and contains no consultation statement.

The instrument contains no penalty provisions. Penalties for non-payment of the levy that flows from this cost determination are located in the Act and the associated regulations, not in this instrument. The instrument is purely a determination of costs and attributions; the coercive machinery sits elsewhere.

Non-payment of an ASIC supervisory cost recovery levy assessment can result in late payment penalties and debt recovery action under the Act and the Commonwealth's general debt recovery framework. ASIC can also, in appropriate cases, treat persistent non-compliance with financial obligations as a factor relevant to licensing decisions, though that is an indirect consequence rather than a direct penalty under this instrument.

Because this instrument has no standalone enforcement provisions, there is nothing within it that an entity could breach. An entity cannot "violate" a cost determination instrument; it can only fail to pay the levy that the instrument helps calculate, and the response to that failure is governed by the Act and regulations, not by this instrument.

The instrument sits within a layered statutory scheme. The primary enabling Act is the ASIC Supervisory Cost Recovery Levy Act 2017, which creates the levy, defines sub-sectors, sets the levy formula, and requires ASIC to make an annual cost determination by legislative instrument under section 10(2). This instrument is that determination for 2023-24.

The ASIC Act (specifically subsection 12A(6)) provides the delegation authority that allows a delegate to sign the instrument on ASIC's behalf. Without that provision, the instrument would need to be made by the Commission itself.

The Legislation Act 2003 governs the instrument's registration, commencement, and disallowance, except where the Act's special provisions in section 11 override the standard rules. Section 2(2) of the instrument flags that the Act's rules take precedence for disallowance-related timing.

The levy calculation regulations (made under the Act) use the cost attribution figures in section 7's table as inputs to the formula that produces individual entity levy assessments. Those regulations are not named in this instrument, but the instrument's cost-attribution function is meaningless without them. The total regulatory cost ($328,108,436) and the sub-sector attributions feed directly into the levy formula in those regulations to produce the dollar amounts that individual entities are assessed.

Listed corporations (item 22) are also subject to continuous disclosure obligations and annual report fees under the Corporations Act 2001; the levy is a separate regulatory cost recovery charge and does not discharge any obligation under the Corporations Act. Similarly, Australian financial services licensees subject to the levy under items 18 through 21 remain bound by their AFSL conditions and must pay the levy in addition to, not instead of, their licensing fees.

The retrospective application mechanism in subsection 10(8) of the Act and section 2(2) of this instrument sits in potential tension with the general principle against retrospective legislation, but the Act explicitly authorises it in this narrow context and this instrument operates squarely within that authorisation.

The instrument records no amendment history. It is a standalone determination for the 2023-24 financial year and, as a matter of instrument design, it is not amended once made: if the cost figures needed correction, a replacement or amending instrument would be required. The Federal Register of Legislation would record any such subsequent instruments separately.

No prior amendments to this specific instrument are disclosed in the source document. The broader ASIC cost recovery levy instrument series includes annual predecessor instruments for each prior financial year (for example, instruments covering 2022-23, 2021-22, and so on), but those are separate legislative instruments, not amendments to this one.

The source document names no cases. No litigation concerning this specific instrument or its predecessor instruments for other financial years is referenced in the text. Given that the instrument is a legislative instrument rather than an administrative decision, it is not amenable to merits review and would only be subject to judicial review on narrow constitutional or statutory construction grounds. No such proceedings are disclosed in the source.

Several features of this instrument and its surrounding scheme warrant close attention.

First, retrospective effect. The instrument is made in November 2024 for the year ended 30 June 2024 (section 5). Under subsection 10(8) of the Act (noted in section 2(2)), it can operate retrospectively. Entities that have provisioned for their expected levy on the basis of prior-year cost determinations may find the actual figures differ, since the determination arrives after year-end. Financial planning based on prior-year attributions is directionally useful but not reliable.

Second, zero attributions are not the same as zero liability. Items 40 and 45 are attributed zero dollars (small securities exchange operators with self-listing function only, and Tier 4 clearing and settlement facility operators). Whether entities in those sub-sectors owe any levy depends on the levy formula and regulations; zero cost attribution may produce a nil or minimal levy but that inference should be verified against the regulations rather than assumed.

Third, the attribution methodology is opaque. The instrument states the output (the dollar figures) but not the methodology by which ASIC allocated $328 million across 47 sub-sectors. Entities cannot verify from this instrument alone whether the attribution to their sub-sector is accurately calculated. The absence of any merits-review avenue for the cost figure or attribution reinforces this opacity: regulated entities bear the cost but have no statutory mechanism to contest the allocation.

Fourth, item numbering gaps. The table runs from items 1 through 48 but item 37 is absent. This may reflect a sub-sector that existed in prior instruments but was removed from the schedule, or it may be a numbering artefact. In either case, entities should not assume that the item numbers are contiguous or that a missing item number is an error rather than a deliberate omission.

Fifth, sub-sector definitions are entirely external. This instrument incorporates sub-sector definitions from the Act and regulations by reference (section 4). An entity uncertain about which sub-sector it falls into must consult those external instruments. Given that some sub-sectors (for example, items 18, 19, 20, and 21 differentiating types of financial advice licensees) have attributions that differ by more than 27-fold (item 19 at $45 million versus item 21 at $90,901), misidentifying one's sub-sector would produce a materially wrong levy estimate.

Sixth, the cost total is large and growing. At $328,108,436 for 2023-24, ASIC's regulatory cost base represents a significant aggregate impost on the financial services industry. This total is passed directly to regulated entities; there is no government contribution to offset it. From a cost-benefit perspective, the levy design assumes that the benefit of ASIC's regulatory activities accrues to the regulated industry (through market integrity, consumer trust, and so on) and that industry should therefore bear the cost. That assumption is contestable for at least some sub-sectors where ASIC's activity is primarily protective of consumers rather than commercially beneficial to licensees, but the levy structure does not distinguish.

Compliance with this instrument, strictly speaking, requires nothing from regulated entities beyond paying whatever levy assessment is subsequently issued under the Act using this instrument's cost figures as inputs. The instrument imposes no positive obligations to act, report, or register.

Practically, compliance with the levy regime as a whole involves the following steps, informed by this instrument.

Entities should confirm which sub-sector or sub-sectors they fall within, by reference to the Act and the levy regulations (not this instrument, which does not define sub-sectors). Given the large spread in cost attributions across sub-sectors, correct sub-sector identification is the single most important compliance step. Entities that operate across multiple sub-sectors may have levy obligations in more than one pool.

Entities should monitor ASIC's annual cost recovery policy documents and industry consultation materials, which typically precede the making of each year's cost determination instrument by several months. These materials give advance notice of likely cost attributions and enable more accurate provisioning.

When a levy assessment issues (which occurs after the cost determination instrument is in force), entities should pay by the due date stated in the assessment. Late payment attracts penalty interest under the Act.

Entities should also verify that ASIC has correctly classified them within the applicable sub-sector before the assessment issues, because challenging a classification after assessment is procedurally harder and may require engaging ASIC directly. Where an entity believes it has been classified in the wrong sub-sector, or that its metrics (which feed the per-entity levy formula) are incorrect, it should raise this with ASIC promptly, as the window for correction may be limited.

Finally, entities subject to the levy should budget on a multi-year basis for material cost recovery increases. The total regulatory cost figure in this instrument ($328,108,436) reflects ASIC's actual 2023-24 expenditure and is set annually with no cap. Sub-sectors that are subject to intensive ASIC supervision in any given year (enforcement campaigns, licensing reforms, or systemic review programs) can expect their attributions to rise materially in that year's determination, independently of any change in their own conduct.