Update to Mutuals Legislation long overdue
03 December 2010
The announcement this week by the Treasury that the Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2010 will be re-laid before Parliament in the next few weeks has been welcomed by Burges Salmon.
“An update of the law applicable to mutuals, including co-ops which are incorporated as industrial and provident societies, is long overdue and the new legislation will go some way to better reflecting how modern co-ops operate,” said Camilla Usher-Clark, a corporate partner and co-op specialist at the Bristol-based law firm.
The process of reform has been on-going since 2002. Two private members bills have been brought and consultations led by the Treasury, with a working group of representatives from the sector established to identify areas in need of update along with the legal and legislative mechanisms available to achieve reform.
Mark Hoban, Financial Secretary, HM Treasury said: “The coalition Government have committed to fostering diversity, promoting mutuals and creating a more competitive banking industry...The new measures will…reduce regulatory burdens on the sector.
“In addition, the Government will consult shortly on electronic communications in the mutual sector. This would…help the sector to reduce its administrative costs.”