The Australian Securities and Investments Commission (ASIC) has revealed that it received barely a day’s notice of the Government’s decision to pursue significant changes to Australia’s litigation funding and class actions regime.
The Treasurer, Josh Frydenberg announced the Government’s intended changes on 22 May and answering questions on notice from Federal Opposition backbencher, Steve Georgana, ASIC revealed it had been advised of the move just the day earlier, on 21 May.
What is more, ASIC said that notification of the Government’s decision had come by way of a phone call from Frydenberg to the ASIC chairman, James Shipton and without any written explanation.
Georgana asked what written information ASIC had received to explain the Treasurer’s policies and whether a copy of the written information could be provided.
In reply, ASIC said it “did not receive any written information to explain the Treasurer’s policies.
Georgana also asked whether ASIC was asked to provide any advice in relation to the policy change in anticipation of the Government’s announcement and was told no.
Frydenberg announced in a media release that mitigation funders were to be subject to greater regulatory oversight involving a requirement for them to hold an Australian Financial Services License (AFSL) and comply with the managed investment scheme (MIS) regime.
Up until now, litigation funders have been exempt from holding an AFSL or being categorised as a financial service under the Corporations Act.
The Parliamentary Joint Committee on Corporations and Financial Services is currently inquiring into the Government’s changes.