ASIC releases litigation funding consultation
The Australian Securities and Investments Commission (ASIC) has released a consultation paper to to seek feedback on proposed guidance and relief for litigation funding schemes.
In ‘Consultation Paper 345 Litigation funding schemes: Guidance and relief (CP 345)’, ASIC proposed to:
- Provide definitional guidance for key terms in the managed investment scheme (MIS) regulatory regime as they applied to litigation funding schemes;
- Grant relief from the equal treatment duty in relation to distributions of a settlement or judgment sum obtained in connection with a litigation funding scheme;
- Extend relief from the dollar disclosure provisions in relation to certain commercially sensitive information; and
- Not remake pre-August 2020 relief instruments, which were due to expire in January 2023.
“ASIC is inviting feedback from industry participants and stakeholders about whether the proposed guidance is necessary and adequate, and whether the proposed relief addresses industry concerns about the workability of the MIS regime for litigation funding schemes,” the regulator said.
In administering the Australian financial services (AFS) licensing and managed investment schemes (MIS) regimes for litigation funding schemes, ASIC aimed to:
- Give effect to the Government’s policy intent; and
- Facilitate the effective operation of the legislative framework by ensuring the workability of the regimes and promoting commercial certainty about their operation.
Submissions to CP 345 were due on 20 August, 2021, and after the consultation ASIC would consider stakeholder feedback on CP 345 and issue a feedback report outlining final positions.
ASIC would also update the relevant regulatory guidance and legislative instruments.
AUTHOR
Chris Dastoor
Recommended for you
The Reserve Bank of Australia (RBA) has lowered rates to a level not seen since mid-2023.
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
