ASIC Corporations (Amendment) Instrument 2021/292
I, Anthony Graham, delegate of the Australian Securities and Investments Commission, make the following legislative instrument.
Date 23 April 2021
Anthony Graham
ASIC Corporations (Amendment) Instrument 2021/292
I, Anthony Graham, delegate of the Australian Securities and Investments Commission, make the following legislative instrument.
Date 23 April 2021
Anthony Graham
Contents
1 Name of legislative instrument
ASIC Corporations (Disclosure in Dollars) Instrument 2016/767
ASIC Corporations (Litigation Funding Schemes) Instrument 2020/787
ASIC Corporations (Disclosure in Dollars) Instrument 2016/767
ASIC Corporations (Litigation Funding Schemes) Instrument 2020/787
1 Name of legislative instrument
This is the ASIC Corporations (Amendment) Instrument 2021/292.
(a) This instrument (other than Schedule 2) commences on the day after this instrument is registered on the Federal Register of Legislation.
(b) Schedule 2 to this instrument commences 12 months after the day this instrument is registered on the Federal Register of Legislation.
Note: The register may be accessed at www.legislation.gov.au.
This instrument is made under subsections 601QA(1), 926A(2), 951B(1) and 1020F(1) of the Corporations Act 2001.
Each instrument that is specified in a Schedule to this instrument is amended as set out in the applicable items in the Schedule.
ASIC Corporations (Disclosure in Dollars) Instrument 2016/767
1 Section 4
Insert:
active general member means a person who is a general member of a litigation funding scheme and who:
(a) is party to any of the following agreements in relation to the scheme:
(i) a funding agreement with the funder;
(ii) a retainer or costs agreement; or
(b) has notified the funder, lawyer or legal practice that the person agrees to, or wishes to, participate in the scheme.
adverse costs insurance premiums means, in relation to a litigation funding scheme, the premiums payable under an insurance policy which operates to indemnify a person against the risk of an adverse costs order being made against them in the legal proceedings.
claim proceeds means, in relation to a litigation funding scheme, the amount for which the claims being or to be pursued in the legal proceedings will or may be settled (including by way of any agreement, compromise, discontinuance, withdrawal, dismissal or waiver of all or part of the claims), or for which judgment is or may be given.
funder has the meaning given by subregulation 7.1.04N(3) of the Regulations.
funding agreement has the same meaning as in subregulation 7.1.04N(3) of the Regulations.
funding budget means, in relation to a litigation funding scheme, the dollar amount up to which the funder has agreed to provide funds, indemnities, or both, to enable the general members of the litigation funding scheme to seek remedies to which the general members may be legally entitled.
funding required means, in relation to a litigation funding scheme, the total amount of funds, or indemnities, or both, that will or may be provided by the funder to enable the general members of the litigation funding scheme to seek remedies to which the general members may be legally entitled.
general member has the meaning given by subregulation 7.1.04N(4) of the Regulations.
legal costs means, in relation to a litigation funding scheme, the total amount of fees, disbursements or both that will or may be charged by a lawyer or legal practice providing services for the purposes of the litigation funding scheme.
legal costs budget means, in relation to a litigation funding scheme, the dollar amount up to which the funder has agreed to provide funds, indemnities, or both, in relation to legal costs.
legal proceedings means, in relation to a litigation funding scheme, legal proceedings in relation to the litigation funding scheme that are referred to in subparagraph 7.1.04N(3)(d)(iii) of the Regulations.
litigation funding scheme has the meaning given by subregulation 7.1.04N(3) of the Regulations.
registered litigation funding scheme means a litigation funding scheme that is a registered scheme.
Regulations means the Corporations Regulations 2001.
retainer or costs agreement means, in relation to a litigation funding scheme, a retainer or costs agreement with the lawyer or legal practice providing services for the purposes of the litigation funding scheme.
2 Section 8
Omit the section, substitute:
8 Litigation funding schemes
Product Disclosure Statements
(1) A responsible person for a Product Disclosure Statement for an interest in a registered litigation funding scheme does not have to comply with paragraph 1013D(1)(m) of the Act in relation to information to be disclosed in accordance with paragraphs 1013D(1)(b), (d) and (e) in relation to any of the following:
(a) funding budget;
(b) legal costs budget;
(c) adverse costs insurance premiums;
(d) funding required;
(e) legal costs;
(f) claim proceeds.
Conditions
(2) The responsible person must:
(a) disclose, in writing or electronically, to any person who is an active general member of the scheme:
(i) in the case of information that is not included in the Product Disclosure Statement in reliance on the exemption in paragraphs (1)(a) to (c)—that information; and
(ii) in the case of information that is not included in the Product Disclosure Statement in reliance on the exemption in paragraphs (1)(d) to (f)—an estimate (expressed as an amount in dollars or a range of amounts in dollars) of that information;
before, or as soon as practicable after, that person becomes an active general member; and
(b) notify, in writing or electronically, each active general member of the scheme of any material change to the information referred to in subparagraphs (a)(i) and (ii) that, but for the exemption in subsection (1), would have been required to be specified in a Product Disclosure Statement prepared on the day before the change:
(i) in the case of a change that is an increase in adverse costs insurance premiums that would be required to be disclosed in accordance with paragraphs 1013D(1)(d) or (e) of the Act if the exemption in subsection (1) did not apply—30 days before the change takes effect; and
(ii) in the case of any other change—before the change or as soon as practicable after, but not more than 3 months after, the change occurs.
Note 1: ASIC has provided other relief in relation to litigation funding schemes under ASIC Corporations (Litigation Funding Schemes) Instrument 2020/787.
Note 2: This section will be repealed by Schedule 2 of the ASIC Corporations (Amendment and Repeal) Instrument 2021/292 on the day that is 12 months after the date that instrument was registered on the Federal Register of Legislation.
ASIC Corporations (Litigation Funding Schemes) Instrument 2020/787
3 At the end of section 11
Add:
“Note: ASIC has also provided relief in relation to the dollar disclosure requirements that apply to the Product Disclosure Statement for interests in a registered litigation funding scheme, under ASIC Corporations (Disclosure in Dollars) Instrument 2016/767.”
ASIC Corporations (Disclosure in Dollars) Instrument 2016/767
1 Section 4
Repeal the following definitions:
(a) definition of active general member;
(b) definition of adverse costs insurance premiums;
(c) definition of claim proceeds;
(d) definition of funder;
(e) definition of funding agreement;
(f) definition of funding budget;
(g) definition of funding required;
(h) definition of general member;
(i) definition of legal costs;
(j) definition of legal costs budget;
(k) definition of legal proceedings;
(l) definition of litigation funding scheme;
(m) definition of registered litigation funding scheme;
(n) definition of Regulations;
(o) definition of retainer or costs agreement.
2 Section 8
Repeal the section.
ASIC Corporations (Litigation Funding Schemes) Instrument 2020/787
3 Section 11 (note)
Repeal the note.