The Financial Markets Authority (FMA) more than doubled the licensing fees collected from the industry over the latest annual reporting period.
According to the just-published FMA annual report for the 12 months to June 30 this year, the regulator collected $770,000 in licence fees from the industry, compared to $341,000 over the 2014 period.
While the licence fee revenue increase was expected as the Financial Markets Conduct Act (FMC) kicked in during the year, the figure fell short of FMA projections.
Industry-derived revenue was more than $900,000 under budget, primarily due to lower than forecast demand for FMC licences and auditor quality reviews.
“As [FMC licensing] is a new revenue stream, it has been difficult to anticipate demand for the various FMC licences,” the FMA report says.
In total the regulator pulled about $1.65 million from industry participants, including: $770,000 of licence fees; $343,000 in auditor quality reviews; $200,000 from superannuation schemes; and, $345,000 of “sundry revenue”.
The regulator underspent its $2 million litigation fund budget by about $600,000 during the year, the FMA accounts show.
“Litigation fund expenditure was below budget primarily because of the timing of litigation matters and the settlement of litigation brought by FMA proceedings,” the FMA report says.
The regulator launched civil action against Milford Asset Management portfolio manager, Mark Warminger, on market manipulation charges this July with a court date yet to be confirmed.
Overall, the FMA reported an almost $2.5 million deficit over the 2015 fiscal period – about $1.3 million more than forecast. The government cut about $1.5 million off the FMA budget in the 2015 year, supplying just under $26.2 million in the period compared to almost $27.8 million in 2014.
In the report introduction, Rob Everett, FMA chief, notes “a spike in spending this year as we began implementing the FMC Act”.
“Expenditure rose to $32.7 million from $29.4 million, driven by increased staff numbers (both permanent and contract) and by higher depreciation and amortisation costs,” Everett says in the report.
“The resulting deficit was covered out of accumulated funds but underlines a point recognised by the board and management – that careful prioritisation of resources is critical as the FMC Act is bedded in.”
Everett was paid between $530,000-540,000 during the year, the accounts show.