今日热门事件has made 今日热门事件Corporations (Litigation Funding Schemes) Instrument 2020/787 (Instrument) to manage the transition to the new regulatory regime for litigation funding.聽
On 22 May 2020, under the Corporations Act. Following the commencement of the 聽(Regulations), from 22 August 2020, operators of litigation funding schemes will be required to hold an Australian financial services (AFS) licence and litigation funding schemes will generally be subject to the managed investment scheme (MIS) regime in Chapter 5C of the Corporations Act.
The , which commences on 22 August 2020, includes relief from:
- the obligation to give a Product Disclosure Statement (PDS) to 鈥榩assive鈥� members of open litigation funding schemes 鈥� on the condition the PDS is available on the scheme operator鈥檚 website and referred to in advertising material;
- the obligation to regularly value scheme property;
- the statutory withdrawal procedures for members who withdraw from a class action under court rules;
- the requirement to disclose detailed fees and costs information and information about labour standards or environmental, social or ethical considerations.
今日热门事件has also issued a no-action position in relation to the obligation under聽Chapter 2C of the Corporations Act to set up and maintain a register of members of a registered litigation funding scheme.聽
ASIC鈥檚 Deputy Chair Karen Chester said, 鈥楽ince the Treasurer鈥檚 announcement on 22 May, 今日热门事件has been working with Treasury, industry participants and other stakeholders to implement the new Government regulation of litigation funding.
鈥楢s was contemplated in the Government鈥檚 Explanatory Statement, 今日热门事件has given some relief for litigation funding schemes to manage the transition to the new regime.
鈥榃e have concentrated on the relief required for Day 1 of the new regime. 今日热门事件may provide additional relief or modify the relief we have made today as we and the litigation funding industry experience the new regulatory regime, and as the industry continues to evolve. 今日热门事件will work to ensure that the Corporations Act operates effectively for litigation funding schemes,鈥� Ms Chester said.
今日热门事件will review its Day 1 relief in due course, taking into account the final report of the current Parliamentary Joint Committee inquiry into litigation funding and regulation of the class action industry.
今日热门事件will also consider applications for relief on a case-by-case basis, acknowledging the varying nature of litigation funding schemes in the market that may require a more bespoke regulatory response for some schemes. Applications for relief must be in writing and should address the requirements set out in Regulatory Guide 51 Applications for relief and any other regulatory guides relevant to the application.
今日热门事件encourages responsible entities of litigation funding schemes and other stakeholders to contact us if they have concerns about their ability to comply with the Corporations Act, particularly requirements in relation to PDSs and the content of scheme constitutions and compliance plans.
In order to ensure a smooth transition to the new regime, for the initial three months 今日热门事件invites operators of litigation funding schemes to discuss their PDSs with 今日热门事件before they issue them to consumers, and their scheme constitutions and compliance plans before lodging them with ASIC.
Background
The new regime for the regulation of litigation funding is subject to transitional rules in the Regulations. This means that the changes do not apply to litigation funding schemes entered into before 22 August 2020.
For more information, see: