The Federal Government has cut operational funding for the Australian Securities and Investments Commission (ASIC) in the coming year, but has provided extra funding for the regulator to monitor the Future of Financial Advice reforms and to register auditors of self-managed superannuation funds.

Last week’s Federal Budget announced $101.9 million in operational funding for ASIC over four years.

The regulator received $28.2 million for this financial year and the Budget papers show 2012/13 operational funding will dip to $15.5 million before rising to a budgeted $28.8 million annually until 2015/16.

The regulator’s operational funding has previously been budgeted on an annual basis. Treasurer Wayne Swan says extending it over four years will ensure ASIC is “appropriately resourced to continue its strong, proactive and consultative oversight of Australia’s financial markets, including surveillance, guidance and education, and the prosecution of breaches of the corporations law”. 

The operational component is part of a $180.2 million funding package to 2015/16.

This includes $43.7 million for ASIC to upgrade its market surveillance system and $23.9 million to implement and enforce the Future of Financial Advice (FOFA) reforms.

“In addition to enhancing the protection for consumers that seek financial advice, the financial services industry will benefit from this funding,” Mr Swan said. “It will enable ASIC to provide regulatory guidance about the reforms and also implement a streamlined system for applying for an Australian financial services licence.”

ASIC will also get $10.7 million to strengthen supervision of auditors of self-managed superannuation funds (SMSF), a response to recommendations from the Cooper review of the superannuation system.

The regulator will develop and maintain an online registration system for auditors, set a competency exam and be able to deregister non-compliant auditors.

Auditors will be able to register from January 31 next year. Mr Swan says registration aims to raise the standard of SMSF auditor competency and ensure minimum standards across the sector.

The Budget papers show the Government will provide the Australian Taxation Office with $10.6 million over five years, including $1.5 million in capital funding in 2011/12, to police registered auditors, check their compliance with ASIC competency standards and refer auditors to ASIC for enforcement.

Increases in the SMSF levy and fees for sitting the competency exam will offset the cost.