The Federal Government is cutting $120 million from the Australian Securities and Investments Commission's (ASIC) funding.

The corporate watchdog is being reduced as the Government pushes for less regulatory oversight in the financial sector.

Funding will be reduced over the next five years, with a spokesperson for Finance Minister Matthias Cormann saying the cuts are need to amend the perceived budget emergency.

The Government is clearly signalling it is keen to reduce regulation of the sector, just a few years after rampant and unrestricted loan practices saw banks spark the global financial crisis.

The previous government lifted the regulator annual funding by $44 million, up to a total $350 million last financial year.

ASIC brings in hundreds of millions in revenue from registering business names and other functions.

But there is talk that the registry will be privatised, strengthened by the Government setting aside $11.7 million to examine a sale.

The privatisation of the ASIC registry is being considered along with the sale of Australian Hearing, Defence Housing Australia, and the Royal Australian Mint.

Parliamentary Secretary to the Treasurer Steven Ciobo said the Government is in favour of more “self-regulation”, speaking at a post-budget breakfast in Sydney this week.

“The Government thinks that there is scope for the financial services industry, and for all the other industries, to self-regulate more,” Mr Ciobo said.

“There will always be (as a general statement of principle) our preference for self-regulation over the need to have a regulator [that is] tax-payer funded intervening in the field.”

Asked if cuts would reduce ASIC's regulatory power, the Finance Department spokesperson said “ASIC will continue to be able to perform its statutory objectives”.

ASIC has been left to decide how it will allocate the reduced funding, and is yet to publically reveal its plans.

The Financial Planning Association's Dante De Gori says ASIC may end up raising the fees it charges for services.

“In particular we will be keeping a watch on the impact to the funding in respect to any adverse effect in terms of licensing costs, and the like, for financial planners,” Mr De Gori told the ABC.

“We will also seek to ensure no impact on the regulator's services and capacity to monitor and supervise the industry.”