ASIC has released a consultation paper outlining its proposals on how it believes funders, insolvency practitioners and lawyers can satisfy the new obligation to have adequate arrangements for managing conflicts of interest that may arise in relation to a litigation scheme or a proof of debt scheme. The obligation was introduced by the Corporations Amendment Regulations 2012 (No.6).  The new regulations exempt litigation schemes and proof of debt schemes from the definition of ‘managed investment scheme’ in section 9 of the Corporations Act 2001 (Corporations Act). In order to clarify that these arrangements are not ‘financial products’ as defined in Chapter 7 of the Corporations Act, the regulations provide exemptions from the licensing, conduct and disclosure requirements.  The proposals in Consultation Paper 185 Litigation schemes and proof of debt schemes: Managing conflicts of interest are intended to apply to funders, lawyers and insolvency practitioners involved in schemes for making a claim which may be pursued by participating in, conducting and funding legal proceedings or proving in the winding up of an insolvent company.