The Federal Government is seeking feedback on plans for an industry-funding model for the Australian Securities and Investments Commission’s (ASIC) regulatory activities.

The move was recommended in the Financial System Inquiry, led by David Murray.

The inquiry’s report says a user-pays model would provide more funding certainty and enhance transparency on costs and operations.

It would “ensure the costs of the regulatory activities undertaken by ASIC are borne by those creating the need for regulation”.

ASIC currently recovers 15% of its regulatory costs through industry levies and fees.

Assistant Treasurer Josh Frydenberg says the Government is committed to “broad consultation with the community” before making a decision.

ASIC faces challenges performing its principal role of ensuring “efficient and well-functioning markets and consumer confidence”.

“You only have to look around to see unprecedented and rapid change in a range of industries,” Mr Frydenberg told a Governance Institute conference.

“This is driven by a range of factors such as globalisation, international regulatory initiatives, technological innovation, new business models, demographic shifts and an evolving competitive landscape. ASIC must adapt to these changes to remain effective.”

Last month the Government launched a capability review of ASIC, in line with a Financial System Inquiry recommendation. 

The review will assess how efficiently and effectively ASIC uses its resources and powers and its preparedness for the “challenges and changes ahead”.

It is expected to be completed by the end of the year.

The review panel comprises Karen Chester, Mark Gray and David Galbally.

Ms Chester is a Commissioner at the Productivity Commission; Mr Gray is a former Queensland under treasurer, CEO of the Queensland Competition Authority and CEO of the Queensland Commission of Audit; Mr Galbally is a partner at Melbourne firm Madgwicks Lawyers.

Financial Services Council CEO Sally Loane has welcomed consultation on the proposed model for funding ASIC.

“Reform of ASIC’s mandate and funding arrangements is long overdue,” she said.

The government’s consultation paper is available here.

Responses to the consultation paper can be sent to asicfunding@treasury.gov.au.

The closing date for submissions is October 9.