Overview

The Co-operatives, Mutuals and Friendly Societies Bill aims to give co-operatives, mutuals, and friendly societies more control over their assets. It allows them to restrict how their capital surplus can be used, preventing distributions to members in certain circumstances, and enabling reinvestment in the organization.

Description

This bill grants the Treasury the power to create regulations allowing eligible mutual entities to restrict the use of their assets. These entities include co-operative societies (registered under the 2014 Act and those meeting specific pre-commencement conditions), friendly societies (as defined in the 1992 Act), and mutual insurance companies.

Asset Restrictions

The regulations will specify which assets can be restricted (all assets, specific types, or those self-designated by the entity). Assets can only be used for the entity's core purposes (as defined by the regulations) or in other circumstances outlined by the Treasury. The regulations will cover procedures for imposing restrictions, making certain rules unalterable or hard to change, and handling exceptions to the restrictions.

Member Compensation & Enforcement

If members lose property rights due to these restrictions, the regulations will outline compensation mechanisms. The bill also includes provisions for enforcement of the restrictions, investigations into potential breaches, and information gathering powers for designated persons. It will also lay down rules on data protection and the use of information obtained through investigations.

Regulations & Powers

The Treasury can impose criminal liability through these regulations, but prison sentences cannot exceed 7 years. The bill necessitates parliamentary approval of any regulations created under it. The regulations may also modify existing laws and allocate new functions and jurisdictions to specific bodies.

Government Spending

The bill does not directly specify any changes to government spending. However, the cost of implementing and enforcing the regulations will likely fall on the government. No figures are currently available.

Groups Affected

• Co-operative Societies: Will gain greater control over their assets, potentially fostering long-term growth and stability.
• Friendly Societies: Similar benefits to co-operatives regarding asset control and reinvestment.
• Mutual Insurance Companies: Will have the option to restrict the use of their surplus capital, impacting their financial operations and dividend policies.
• Members of Mutual Entities: May experience changes to their property rights, with the potential for compensation if affected by asset restrictions.
• Government and Regulatory Bodies: Will have responsibility for creating and enforcing regulations.

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