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Consultation Paper - Proposed Financial Market Supervision Cost Recovery Model


Friday, 26 August 2011

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The Assistant Treasurer has released a consultation paper on a proposed market supervision fee methodology and cost recovery arrangements for the recovery of funding provided to ASIC to perform market supervision functions in a competitive multi-operator market environment. The proposed cost recovery arrangements are intended to replace the current interim cost recovery arrangements from 1 January 2012.

The paper canvasses a proposed cost recovery fee model for cash equities markets based on both trades and messages. Individual market operators and participants will pay a proportional charge based on the number of trades and messages reported from them to the ASIC IT surveillance system. The proposal contemplates that market participants will also be charged a quarterly market supervision fee.

The proposed cost recover model maintains the current fee arrangements for small financial markets. Futures markets will be billed using the same model as before, although the fee will be slightly increased as it is not anticipated that funding will be available from excess compensation funds in future cost recovery periods.

The proposed cost recovery fee arrangements are in line with the Government’s Cost Recovery Guidelines which seek, through charging a fee on both market operators and participants, to enable the Government to achieve a more efficient and equitable allocation of ASIC’s market supervision cost burden across industry. 

Amendments to the Corporations (Fees) Act 2001 to allow fees to be charged to market participants, in addition to market operators, were introduced in the Parliament on 18 August 2011.  Details of the final cost recovery arrangements will be prescribed in the Corporations (Fees) Regulations 2001, and will be released for consultation in the coming months.  Industry feedback to this paper will inform details of the proposed cost recovery arrangements and development of the draft Fees Regulation.

Making a submission

Interested parties are invited to comment on the paper. While submissions may be lodged electronically or by post, electronic lodgement is preferred. For accessibility reasons, please submit responses sent via email in a Word or RTF format. An additional PDF version may also be submitted.

All information (including name and address details) contained in submissions will be made available to the public on the Treasury website unless you indicate that you would like all or part of your submission to remain in confidence. Automatically generated confidentiality statements in emails do not suffice for this purpose. Respondents who would like part of their submission to remain in confidence should provide this information marked as such in a separate attachment. Legal requirements, such as those imposed by the Freedom of Information Act 1982, may affect the confidentiality of your submission.

Closing date for submissions: Friday, 23 September 2011

Address written submissions to:
Financial Markets Unit
Corporations and Capital Markets Division
The Treasury
Langton Crescent

Email: MarketSupervision@treasury.gov.au

For enquiries, please call Percy Bell (02) 6263 2048

Documents Available:

Acrobat (PDF) documents

 Acrobat (PDF)

Consultation Paper - Proposed Cost Recovery Fee Arrangement for Australia’s Financial Markets  364.71kb
Corrigendum  63.38kb

Microsoft Word (DOC) documents

 Microsoft Word (DOC)

Consultation Paper - Proposed Cost Recovery Fee Arrangement for Australia’s Financial Markets  693.50kb

Microsoft Word (RTF) documents

 Microsoft Word (RTF)

Corrigendum  39.74kb

Related Items:

Submissions: Consultation Paper - Proposed Financial Market Supervision Cost Recovery Model - 27/09/2011

Treasury has received 13 submissions in response to the consultation on proposed Financial Market Supervision Cost Recovery Model. Ten of these are public submissions, and there is three confidential submissions. The public submissions are listed below and are accessible by selecting the author.

The opinions expressed in the submissions are those of the authors and do not necessarily reflect the views of the Government or the Treasury.

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