The MFAA has lodged a submission on Treasury’s proposal for industry to fund the activities of the Australian Securities & Investments Commission (ASIC) in relation to the credit and credit intermediary sectors. The proposal followed the Government’s acceptance of Financial System Inquiry Recommendation 29 (Strengthening the Australian Securities and Investments Commission’s funding and powers).
Treasury’s proposal seeks to have those Australian industries regulated by ASIC, that is, the financial services, credit, corporations, investments, superannuation, market infrastructure and insurance sectors, fund ASIC’s activities through fees and levies. This includes regulatory surveillance and enforcement costs associated with each sector. The proposal would see licensed mortgage brokers and broker groups paying a higher amount for each dollar of credit facilitated than lenders with charges also potentially being levied at multiple points in the value chain for a single deal. This is not seen as fair and equitable, would be complex to administer and also has the potential to negatively impact the competitive balance of the home lending market.
The MFAA’s submission advocated three alternative models which it believes would have substantially less impact on the sector and its participants while achieving Treasury’s funding objectives for the regulator.
The full submission can be viewed here.