Presbyterian Mutual Society Working Group
This Group was due to Report last September but we're still waiting. Maybe soon..........
In the meantime the collapse of this Society into administration led initially to the immediate application of the adminitration procedure to Northern Irish I & P societies. This has not yet been done in GB.
Less directly, it has alsoled to a review of the Northern Ireland Credit Union and I & P Law (see paras 4.7.-4.15 on credit unions and 4.30. -4.40 on I & P's) and ripples in the UK (see pages 161-162 of this Consultation Document from HM Treasury)
In essence, NI credit unions would come under FSMA alongside their GB bretheren and thus enjoy the shelter of the Financial Services Compensation Scheme but their registration would stay with the Northern Ireland devolved Government as that what the movement there wants. I & P's will stay with NI but may get Law Reform along GB lines while also having to spell out ultra clearly to people with shares in them that this is risk capital and NOT protected as a deposit.
In GB, as in NI,the idea would be to apply the financial promotion regime (whereby any promotion of an investment has to be approved by a regulated person) to I & P shares - at least if they are not bound by of an effective Code of Practice (as Co-operativeUK's members are) which makes them tell people with shares that they have risk capital and not a deposit or savings and will lose the lot if there's a problem with the society's solvency.
In the meantime the collapse of this Society into administration led initially to the immediate application of the adminitration procedure to Northern Irish I & P societies. This has not yet been done in GB.
Less directly, it has alsoled to a review of the Northern Ireland Credit Union and I & P Law (see paras 4.7.-4.15 on credit unions and 4.30. -4.40 on I & P's) and ripples in the UK (see pages 161-162 of this Consultation Document from HM Treasury)
In essence, NI credit unions would come under FSMA alongside their GB bretheren and thus enjoy the shelter of the Financial Services Compensation Scheme but their registration would stay with the Northern Ireland devolved Government as that what the movement there wants. I & P's will stay with NI but may get Law Reform along GB lines while also having to spell out ultra clearly to people with shares in them that this is risk capital and NOT protected as a deposit.
In GB, as in NI,the idea would be to apply the financial promotion regime (whereby any promotion of an investment has to be approved by a regulated person) to I & P shares - at least if they are not bound by of an effective Code of Practice (as Co-operativeUK's members are) which makes them tell people with shares that they have risk capital and not a deposit or savings and will lose the lot if there's a problem with the society's solvency.
posted by Ian Snaith | 1:15 PM
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