The Government is seeking to recover around $42.88m related to ASIC's expenditures supervising financial markets from 1 July 2013 to 30 June 2015. The Stockbrokers Association of Australia has warned that the model could see some broking firms hit with an increase in supervisory costs of up to 400%. The association said this would disproportionately impact smaller firms.
“The broking industry already contributes around $16 million to ASIC supervision through the Market Supervision Cost Recovery levy,” Stockbrokers Association of Australia CEO Andrew Green said.
Green said stockbrokers were already subject to other cost recovery regimes, including AUSTRAC cost recovery and Financial Ombudsman Service (FOS) annual fees.
“The ASIC funding proposal is just another tax on the industry which could lead to firms closing operations in Australia and moving offshore to lower cost jurisdictions. This will weaken Australia’s position and compromise our ability to compete with other markets in our region,” he said.
Green said the association was instead proposing a transaction based levy as an alternative.
“While a levy has a number of shortcomings, it would overcome the difficulties brokers face in passing through costs. A transaction levy such as that employed in Hong Kong, which is based on the dollar value of the transaction, may be preferable to a cost recovery burden that would significantly damage the broking sector.”
An industry body has warned that a new ASIC funding proposal will lead to job losses for stockbrokers.