Levy types
The Levy Act 2023, Levy Regulations 2023 and Levy (Collection) Act 2023 specify how estimates are calculated and imposed on the relevant financial services sectors. The legislative framework outlines three different levies that can be used to fund the CSLR:
Annual levy
The annual levy capped at $20 million per sub-sector.
What is it?
Who pays?
Coverage?
The annual levy capped at $20 million per sub-sector
Four defined sub-sectors of the financial services industry
- Licensees that provide personal advice to retail clients on relevant financial products;
- Credit providers
- Credit Intermediaries
- Securities dealers
All levies cover unpaid compensation for eligible complaints, AFCA complaint fees and charges, CSLR operating costs, capital reserve contribution and ASIC administrative costs relating to that particular financial year.
Further levy
If CSLR anticipates that total costs will exceed the initial estimate of the annual levy, an additional levy may be imposed within the same period. This ensures sufficient funds to cover claims, fees, and costs. The combined annual and further levies for a sub-sector cannot exceed $20 million per period.
What is it?
Who pays?
Coverage?
If CSLR anticipates that total costs will exceed the initial estimate of the annual levy, an additional levy may be imposed within the same period. This ensures sufficient funds to cover claims, fees, and costs. The combined annual and further levies for a sub-sector cannot exceed $20 million per period.
The subsector/s for which further levies are required to pay.
As above.
Special levy
If CSLR’s initial cost estimate for a sub-sector exceeds the $20 million cap, ASIC can only issue the annual levy up to this cap. Before issuing a special levy, the CSLR operator must complete a revised estimate of claims, fees, and costs for the relevant period.
If the revised estimate still exceeds the $20 million cap, a special levy may be applied through a ministerial determination.
What is it?
Who pays?
Coverage?
If CSLR’s initial cost estimate for a sub-sector exceeds the $20 million cap, ASIC can only issue the annual levy up to this cap. Before issuing a special levy, the CSLR operator must complete a revised estimate of claims, fees, and costs for the relevant period.
If the revised estimate still exceeds the $20 million cap, a special levy may be applied through a ministerial determination.
The Minister has discretion over the application and amount of this levy. Some of the legislated options include:
- instructing CSLR make payments to a specified class of persons in specific instalments over a specified period; and
- imposing the special levy on sub-sectors beyond the four defined sub-sectors mentioned above.
As above.