ASIC has extended the relief from certain dollar disclosures in PDSs for litigation funding schemes in ASIC Corporations (Disclosure in Dollars) Instrument 2016/767 (dollar disclosure instrument) until 1 October 2026. The existing relief was due to expire on 28 April 2022. Relief has been extended by ASIC Corporations (Amendment) Instrument 2022/264.
ASIC extended the relief because, in the context of litigation, public disclosure of some categories of information could provide a tactical advantage to opposing parties in class actions and may not be in the interests of scheme members.
The relief is consistent with the current practice of Australian courts in permitting the non-disclosure of such information to opposing parties in class actions.
Consultation process
The relief was provided on an interim basis in April 2021, ahead of public consultation about the continuation of the relief. ASIC consulted publicly on continuing the relief in Consultation Paper 345 Litigation funding schemes: Guidance and relief (CP 345), issued 9 July 2021.
Submissions supported the ongoing need for the relief.
ASIC will release further information in response to the issues raised in CP 345 in coming months.
Background
From 22 August 2020, operators of litigation funding schemes generally need to hold an Australian financial services licence, and litigation funding schemes will generally be subject to the managed investment scheme regime under the Corporations Act.
On 21 August 2020, ASIC granted some relief for responsible entities of litigation funding schemes in ASIC Corporations (Litigation Funding Schemes) Instrument 2020/787 to ensure the Corporations Act operates effectively for these types of schemes.
On 28 April 2021, ASIC granted responsible entities of registered litigation funding schemes relief from the requirement to disclose certain sensitive information in dollar terms in the scheme’s Product Disclosure Statement (PDS). To implement this relief, ASIC made ASIC Corporations (Amendment) Instrument 2021/292 which amended the Dollar Disclosure Instrument for a period of 12 months, see. 21-098MR for more information.
For more information, see: