Australian Treasurer Josh Frydenberg is set to announce new regulations and rules for third party litigation funding, according to the Australian Financial Review.
Litigation funders will be classified under the country’s Corporations Act, and the government will require all funders to hold an Australian Financial Services Licence in order to operate. This also means that funders will be brought under the Australian Securities and Investments Commission’s oversight and that they will have to comply with Australia managed investment scheme rules.
“Now more than ever we want Australian businesses staying in business and focused on keeping people in jobs rather than fending off class actions funded by unregulated and unaccountable parties,” Frydenberg said. “The number of class actions has tripled over recent years. It is now even more important that litigation funding activities are regulated in a manner that is consistent with other financial services and products that seek to provide investment returns to consumers.”