ASIC Supervisory Cost Recovery Levy Amendment Act 2018

Overview

The ASIC Supervisory Cost Recovery Levy Amendment Act 2018, enacted on 11 April 2018 by the Parliament of Australia, serves to modify the ASIC Supervisory Cost Recovery Levy Act 2017. This legislation aims to address gaps and problems within the existing regulatory framework by introducing changes that enhance the oversight and administration of levies applicable to certain financial entities. The policy objective behind this amendment is to ensure that financial benchmarks and entities administering them are properly regulated, thus maintaining market integrity and investor confidence. The Act introduces amendments that specifically target benchmark administrators and their compliance with licensing requirements under the Corporations Act 2001. The Act includes provisions that update the definition of "market infrastructure entity" to include benchmark administrators, as well as entities that administer significant financial benchmarks but fail to comply with licensing requirements. These amendments are designed to align the levy system with the evolving financial landscape, ensuring that entities involved in the administration of financial benchmarks contribute appropriately to the costs of supervision. The Schedule to the Act, which comes into effect on 12 April 2018, specifies the financial benchmarks and the entities affected by these amendments.

Scope and Application

The ASIC Supervisory Cost Recovery Levy Amendment Act 2018 amends the ASIC Supervisory Cost Recovery Levy Act 2017 by introducing new definitions and expanding the scope of entities subject to the levy. The Act applies to financial benchmark administrators and certain persons who administer significant financial benchmarks but contravene the requirement to hold a benchmark administrator licence. The amended Act broadens the geographic and jurisdictional reach by incorporating additional entities into the levy framework, which is primarily Commonwealth-focused. The Act commenced on 11 April 2018, with specific provisions relating to financial benchmarks commencing on 12 April 2018, contingent on the commencement of related provisions in other legislation. The application of the Act is further defined and potentially extended through subordinate instruments, which may provide additional details or clarifications regarding the levy's application to specific entities or benchmarks.

Key Provisions

The ASIC Supervisory Cost Recovery Levy Amendment Act 2018 amends the ASIC Supervisory Cost Recovery Levy Act 2017. The Act expands the definition of 'market infrastructure entity' to include 'benchmark administrator licensee' and 'person who administers a significant financial benchmark and contravenes the requirement to hold a benchmark administrator licence'. This amendment is intended to clarify the scope of entities subject to the levy. Entities governed by this Act, specifically those defined as market infrastructure entities, now include benchmark administrator licensees and individuals or organisations administering significant financial benchmarks without the required licence. These entities must ensure compliance with the levy requirements, which include accurately reporting and paying the levy as specified under the ASIC Supervisory Cost Recovery Levy Act 2017. Failure to comply with the levy obligations may result in civil and criminal consequences. The Act does not specify exact penalties but references the primary Act for such details. Penalties can include fines and, in severe cases, imprisonment, depending on the nature and extent of the breach. These consequences are designed to enforce adherence to the levy and maintain regulatory standards within the financial sector.