Market supervision and competition cost recovery

This information sheet (INFO 150):

  1. includes a brief background to the market supervision cost recovery regime, including changes effective 1 July 2015

  2. outlines the basis for imposing fees on ASX Limited (ASX) and Chi-X Australia Pty Ltd (Chi-X) market participants

  3. provides details about the cost recovery arrangements applying to participants from 1 July 2015 to 30 June 2016, and

  4. provides a brief overview of the billing arrangements for ASIC market supervision cost recovery.

1. Background to the market supervision and competition cost recovery regime

The market supervision cost recovery regime recovers funding the Government provides for ASIC's market supervision functions since the transfer of market supervision to ASIC on 1 August 2010. Legislative amendments were made in late June 2015 to update ASIC's cost recovery regime effective from 1 July 2015.

On 1 January 2012 fees were imposed on ASX Limited (ASX) and Chi-X Australia Pty Ltd (Chi-X) cash equity market participants for the performance by ASIC of its market supervision functions under Part 7.2A of the Corporations Act 2001 (Corporations Act). The cost recovery framework in place between 1 January 2012 and 30 June 2013 was developed by Treasury and ASIC in consultation with industry in the second half of 2011. Between late 2012 and May 2013 Treasury consulted on amendments to that regime which took effect on 1 July 2013.These arrangements were updated in June 2015 to reflect ASIC's 2015-16 budgeted expenditure. The new regime complies with the Australian Government Cost Recovery Guidelines.

Three tranches of funding are currently provided by the Government for ASIC to:

  1. undertake the new regulatory functions post-transfer of market supervision to ASIC

  2. develop and implement a framework to support market competition, and

  3. implement ASIC's Enhanced Market Supervision (EMS) program of works.

More details on each of these can be found in Appendix A to ASIC's Market Supervision Cost Recovery Implementation Statement (1 July 2015–30 June 2016) available at www.asic.gov.au/markets.

Please note: ASIC’s costs for continuing to perform the market supervision functions that it undertook prior to the transfer of market supervision are not subject to cost recovery.

2. Basis for imposing fees on market participants

In line with the Government’s cost recovery principle that costs should be recovered from those entities that have created the need for regulation, ASIC’s additional expenditure in relation to the cash equities markets (for ASX-listed equity securities) for the period from 1 July 2015 to 30 June 2016 will be recovered from ASX, Chi-X and their market participants.

The legal authority for charging participants is set out in the following:

  • Section 6A of the Corporations (Fees) Act 2001 (Fees Act) states that the Corporations (Fees) Regulations 2001 (Fees Regulations) may prescribe a fee for the performance by ASIC of its functions in relation to operators of and participants in a licensed market under Part 7.2A (Supervision of financial markets) of the Corporations Act.

  • The Corporations (Fees) Amendment Act 2011, which commenced on 1 January 2012, amended section 7 of the Fees Act to support the charging of participants of licensed financial markets for the performance by ASIC of its market supervision functions under Part 7.2A of the Corporations Act.

  • The Corporations (Fees) Amendment Regulations 2015 (No. 1) amended the Fees Regulations to prescribe the quarterly fee arrangements that will apply to operators of and participants in licensed financial markets from 1 July 2015.

3. About the cost recovery arrangements for ASX and Chi-X market participants between 1 July 2015 and 30 June 2016

Consistent with the regime in place prior to 1 July 2015, fees will be charged quarterly in arrears, so market participants will receive their first invoice statement from ASIC for the quarter ending 30 September 2015 by mid-October 2015.

 Since 1 January 2012, market participants are charged wholly variable fees based on their share of the total number of transactions [1] and messages[2] for securities executed on or reported to the ASX and Chi-X cash equities markets by all market participants during the quarter (as recognised by ASIC's real-time market surveillance system). The key changes for market participants in the cost recovery regime that came into effect on 1 July 2015 are:

  • Cost recovery allocated to transactions / trading activity will increase (from $1,789,000 per quarter to $1,796,000 [3] per quarter), and cost recovery allocated to messaging activity will decrease (from $1,807,000 per quarter to $1,752,000 [4] per quarter).
  • A new quarterly minimum fee of  $1,905 (prevoiusly $1,835) will be applied to each market participant [5] of ASX and Chi-X as ASIC's cash equity market participant supervision costs are not wholly variable. Market participants subject to the market integrity rules have a dedicated pool of resources allocated to their supervision, regardless of their trading and messaging activity and the new quarterly fee of $1,835 per market participant reflects this.

Notes

1. Note that the transaction and message data used to calculate market participants' fees are those used by ASIC for undertaking its market surveillance activities. Back to text

2. Shares, ETFs and listed managed funds only. Back to text

3. Amount assumes that FIDA payments of $1.465 million p.a. partially offset market participants' variable charges. If the FIDA payments are not approved this amount will be higher ($1,987,625). See the Cost Recovery Implementation Statement (1 July 2015 – 30 June 2016) for more information. Back to text

4. Amount assumes that FIDA payments of $1.465 million p.a. partially offset market participants' variable charges. If the FIDA payments are not approved this amount will be higher ($1,926,625). See the new Cost Recovery Implementation Statement (1 July 2015 – 30 June 2016) for more information. Back to text

5. ASIC prepares invoice statements per trading PID in the billing quarter where these exist; if a market participant does not have a PID, these are prepared per market participant. If a market participant has more than one PID, the amount of $1,905 will be levied across the PIDs by dividing $1,905 by the number of PIDs. Back to text

4. The billing process

Timing of the invoice statements

(a) When will market participants receive their invoice statements from ASIC?

Market participant fees will be charged quarterly in arrears.

The relevant billing periods are each period of 3 months starting from: 1 July 2015, 1 October 2015; 1 January 2016; and 1 April 2016.

ASIC will send invoice statements to each market participant by post within three weeks of the end of each billing period.

View example invoice statements

Paying your invoice statement

(b) When are fee payments required to be made to ASIC?

To provide market participants sufficient time to arrange their payments, regulation 9 of the Fees Regulations was amended by the Corporations (Fees) Amendment Regulations 2013 (No. 1) and imposes liability for late payment penalty fees if any market supervision fees:

  • are outstanding at the end of the quarter in which they were incurred (note: fees for a quarter are incurred in the next quarter), and

  • remain overdue after the passage of further quarters.

As noted above, ASIC will send invoice statements to each market participant by post within three weeks of the end of each billing period, so market participants will have in excess of 60 calendar days to pay their fees before any late payment penalty fees are imposed.

The payment due date for each billing period is shown in the table below.

Payment due date for each billing period

End of billing period

Payment required (on or before)

30 September 2015

31 December 2015

31 December 2015

31 March 2016

31 March 2016

30 June 2016

30 June 2016

30 September 2015

 How to pay your bill: Phone ASIC on 1300 300 630

(c) What payment methods are available?

ASIC accepts payment via BPay, EFT, Postbill Pay and mail (cheque payments and money orders).

(d) What should I do if I don’t receive an invoice statement from ASIC?

Market participants will be directly invoiced by ASIC.

If you believe you should have received an invoice statement from ASIC but have not, please contact ASIC:

Questions about your invoice statement

(e) What should I do if I have a question about my invoice statement?

If you have a question about your invoice statement, please email market.participants@asic.gov.au. Your question should include your ASIC account number, which is located on the left hand side of your invoice statement, your contact details and a detailed description of your question.

Any questions in relation to your invoice statement should be raised with ASIC within 14 calendar days of the issue date of the invoice statement. Please note that you will still be required to settle your invoice in full with ASIC. Any necessary adjustments to your fee liability following ASIC's review will be reflected in a subsequent invoice statement.

See questions about your invoice statement

Late payment penalty fees

(f) What happens if market participants do not pay their invoice statements on time?

Regulation 9 of the Fees Regulations was amended by the Corporations (Fees) Amendment Regulations 2013 (No. 1) and imposes liability for late payment penalty fees if any market supervision fees:

  • are outstanding at the end of the quarter in which they were incurred (note: fees for a quarter are incurred in the next quarter), and

  • remain overdue after the passage of further quarters.

ASIC will send invoice statements to each market participant by post within three weeks of the end of each billing period, so billed entities will have in excess of 60 calendar days (until the end of the quarter immediately after the quarter the fees relate to) to pay their fees without incurring late payment penalty fees.

Regulation 9 of the Fees Regulations provides for differential late payment penalty fees depending on the amount of unpaid market supervision fees and late payment penalty fees, and the number of billing periods for which one or more fees have not been paid.

The table below shows the amount of late payment penalty fees that may be incurred (subregulation 9(4) of the Fees Regulations explains how to calculate late penalty fees).

Total unpaid market supervision fees and late payment fees ($X)

Fee is one billing period late

Fee if two or more billing periods late

$ X < $ 10,000

$ 150

$ 250

$ 10,000 >= $X < $ 50,000

$ 300

$ 500

$ 50,000 >= $X < $ 100,000

$ 1,200

$ 2,000

$X >= $ 100,000

$ 2,400

$ 4,000

Legal action may also be taken by ASIC (on behalf of the Commonwealth) to recover any outstanding fee liabilities.

(g) What correspondence will market participants receive if their fees become overdue?

If you have not paid your invoice statement by the due date ASIC will apply the applicable late payment fee according to Regulation 9 on your next quarterly invoice statement.

For more information:

Contact ASIC if you have any inquiries about the billing process:

  • Phone: 1300 029 454

(select option 3 – Participant inquiries or matters)

Further information on market supervision and competition cost recovery and billing is located on ASIC’s website at www.asic.gov.au/markets. Information available on the site includes:

You can also subscribe to receive regular updates from ASIC on billing and other issues (www.asic.gov.au/market-supervision).

Important notice

Please note that this information sheet is a summary giving you basic information about a particular topic. It does not cover the whole of the relevant law regarding that topic, and it is not a substitute for professional advice.

You should also note that because this information sheet avoids legal language, wherever possible, it might include some generalisations about the application of the law. Some provisions of the law referred to have exceptions or important qualifications. In most cases, your particular circumstances must be taken into account when determining how the law applies to you.

This is Information Sheet 150 (INFO 150), reissued in August 2013. Information sheets provide concise guidance on a specific process or compliance issue or an overview of detailed guidance.

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Last updated: 09/10/2013 12:00