ASIC extends class order relief for funded representative actions
The Australian Securities and Investments Commission (ASIC) has extended the class order relief for funded representatives involved in the winding up of an insolvent company.
Granted to lawyers and funders involved in all funded representative actions and funded proof of debt arrangements, Class Order 13/18 'Funded representative proceedings and funded proof of debt arrangements exclusion from the National Credit Code' will now apply until 12 July 2013.
According to the regulator, relief was extended in order to allow time for the commencement of the Corporations Amendment Regulations 2012, which also commence on 12 July.
The extension of the class order will relieve the requirements of lawyers and funders involved in proceedings that amount to 'credit' to hold an Australian credit licence or to comply with the conduct, disclosure and responsible lending requirements of the National Credit Act.
From 12 July, a litigation scheme and a proof-of-debt scheme will be exempt from the definition of a managed investment scheme in section 9 of the Corporations Act, according to ASIC.
Despite the granting of relief, the regulator stated that funders and lawyers "must have adequate arrangements to manage conflicts of interest", which it outlines in Consultation Paper 185 'Litigation schemes and proof of debt schemes: Managing conflicts of interest'.
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