These notes refer to the Co-operative and Community Benefit Societies and Credit Unions Bill as introduced in the House of Commons on 21 January 2009 [Bill 14]

CO-OPERATIVE AND COMMUNITY BENEFIT SOCIETIES AND CREDIT UNIONS BILL

EXPLANATORY NOTES

INTRODUCTION

1. These explanatory notes relate to the Co-operative and Community Benefit Societies and Credit Unions Bill, as introduced in the House of Commons on 21 January 2009. They have been prepared by HM Treasury, with the consent of Malcolm Wicks MP, the Member sponsoring the Bill, in order to assist the reader of the Bill and to help inform debate on it.

2. These notes need to be read in conjunction with the Bill. They are not, and are not meant to be, a comprehensive description of the Bill. So where a clause or part of a clause does not seem to require any explanation or comment, none is given.

TERRITORIAL EXTENT AND APPLICATION

3. The Bill extends to Great Britain only, with a power to extend certain provisions by to the Channel Islands. HM Treasury have sought the consent of the authorities in the Channel Islands to the extension provision and final confirmation of the position is awaited.

4. There are no devolution issues affecting the Scottish Executive because the Bill covers matters reserved to Westminster under the Scotland Act 1998.

5. Industrial and provident societies in are governed by their own legislation and the Bill does not extend to Northern Ireland. However, the Bill does contain a power to make consequential amendments to enactments, including those that extend to Northern Ireland.

Bill 14─EN 54/4

1 These notes refer to the Co-operative and Community Benefit Societies and Credit Unions Bill as introduced in the House of Commons on 21 January 2009 [Bill 14]

SUMMARY AND BACKGROUND

6. The Bill was introduced by Malcolm Wicks MP as a Private Member’s Bill on 21 January 2009. The clauses were prepared by the Government on Mr Wicks’ behalf.

7. The purpose of the Bill is to introduce certain reforms to the law of industrial and provident societies.

8. Industrial and provident societies are mutual societies. The main statute on industrial and provident societies is the Industrial and Provident Societies Act 1965 (the “1965 Act”). There are also a number of other Acts relevant to industrial and provident societies (together with the 1965 Act, the “Industrial and Provident Societies Acts”)1.

9. The reforms introduced by the Bill are:

to require new industrial and provident societies (other than credit unions) to be registered as co-operative or community benefit societies;

to re-name the Industrial and Provident Societies Acts;

to apply the Company Directors Disqualification Act 1986 to industrial and provident societies;

to give the Treasury powers to apply to industrial and provident societies, with appropriate modifications, company law on investigation of companies, company names and dissolution and restoration to the register; and

to give the Treasury powers to make provisions for credit unions corresponding to any provisions applying to building societies.

10. A number of these reforms were consulted upon in a public consultation “Review of the GB cooperative and credit union legislation”, carried out by the Government from 21 June to 12 September 2007. The proposals received the support of the sector. The consultation, together with a summary of responses and the Government’s response, are published on HM Treasury’s website (www.hm- treasury.gov.uk).

1 The Acts are the Industrial and Provident Societies Acts 1965, 1967, 1975, 1978 and 2002; the Friendly and Industrial and Provident Societies Act 1968, and the Co-operatives and Community Benefit Societies Act 2003.

2 These notes refer to the Co-operative and Community Benefit Societies and Credit Unions Bill as introduced in the House of Commons on 21 January 2009 [Bill 14]

11. The Bill will introduce certain changes that will lead to the replacement of the expression “industrial and provident society” with the expression “co-operative society” in various parts of the statute book. The reason for this change is that the expression “industrial and provident society” is now widely perceived as old- fashioned whilst the expression “co-operative society” is more modern and more widely used.

12. At present, there is no statutory requirement for an industrial and provident society to register with the FSA (which is the registrar of such societies.) The 1965 Act states that societies “may” be registered. It should be noted that there is to be no change to the provisions governing registration of credit unions. The Bill will amend the 1965 Act so that new societies will be required to register as either a co-operative society or a community benefit society. The 1965 Act gives only limited recognition to the concepts of “co-operative society” and “community benefit society”, which together with credit unions are now commonly used to describe relevant descriptions of societies.

13. To reflect the new requirement to register as co-operative or community benefit societies, the Bill will change the name of the Industrial and Provident Societies Acts. The terms “co-operative and community benefit societies”, and where appropriate “credit unions”, will appear in the short titles of those Acts.

14. The Company Directors Disqualification Act 1986 provides for the disqualification of officers of companies and various other bodies when such officers have seriously mismanaged those bodies. Disqualification means being prohibited for a period of time from being a director or otherwise being involved in the management of a company or other body or from acting as an insolvency practitioner.

15. The Company Directors Disqualification Act 1986 does not currently apply to industrial and provident societies, although it applies to other mutuals, such as building societies and friendly societies, and to Northern Ireland industrial and provident societies.

16. The Bill will amend the Company Directors Disqualification Act 1986 to apply it to industrial and provident societies. The aim of this is to bring this aspect of the corporate governance of industrial and provident societies in line with companies and other mutual societies.

17. The Bill gives the Treasury powers to apply Parts 14 and 15 of the 1985 and Parts 5 and 31 of the to industrial and provident societies, with appropriate modifications. Those Parts concern investigations, company names, and dissolution and restoration to the register. The general aim of the application to industrial and provident societies of this company legislation is to modernise some aspects of the law of industrial and provident societies by bringing it in line with company law. This approach will enable the Treasury to consult

3 These notes refer to the Co-operative and Community Benefit Societies and Credit Unions Bill as introduced in the House of Commons on 21 January 2009 [Bill 14] industrial and provident societies and other interested parties on the detailed regulations that are likely to be required before making any substantive changes to the legislation.

18. The Bill gives the Treasury the power to apply to credit unions any enactment applying to building societies. This would allow changes to be made to bring credit union law in line with building society law on specific issues. A number of provisions of the Building Societies Act 1986 deal with issues specific to institutions which accept deposits and could be relevant to credit unions. These include requirements to provide a summary financial statement to members and depositors, audit and accounts requirements, rules on electronic voting, issues relating to directors and governance matters and duty to disclose interests, ownership of subsidiaries and prohibition on floating charges and restrictions on dealing in derivatives and certain other financial instruments.

COMMENTARY ON CLAUSES

Clause 1: Registration of societies as co-operative or community benefit societies

19. Subsection (1) replaces section 1 of the 1965 Act with revised provisions requiring all new societies registered under the Act, other than credit unions, to be registered by the Financial Services Authority (FSA) as co-operatives or community benefit societies. The FSA is the registrar for industrial and provident societies. Subsection (1) also sets out the basis on which societies may be registered, re- enacting the existing subsection (1).

20. Subsection (2) inserts into the 1965 Act a new section 4A, which deals with the treatment of those societies registered, or treated as registered, under the “old” section 1 of the 1965 Act (section 1 as it stands at present). These societies did not have to register as a particular type of society.

21. Subsections (3) and (4) amend section 16 of the 1965 Act, which deals with circumstances in which a society’s registration may be cancelled, so that it will reflect the registration provisions inserted into the 1965 Act by subsection (1). Subsection (4) inserts into Section 16 of the Act a new subsection (1A), permitting the FSA, as registrar, to cancel the registration of a society where it does not meet the statutory definitions set out in new section 1(2) and new 1(3) to be inserted by subsection (1). Again the status of societies registered, or treated as registered, under the “old” section 1 of the 1965 Act is dealt with, at new section 16(1A)(c). Pre-2009 Act societies are not to be affected by the definitions of “co-operative society” or “community benefit society” inserted by subsection (1) of this Bill.

4 These notes refer to the Co-operative and Community Benefit Societies and Credit Unions Bill as introduced in the House of Commons on 21 January 2009 [Bill 14]

22. Subsection (5) makes an additional amendment to the 1965 Act, ensuring that the definition of a “pre-2009 Act” society” reflects that inserted into the Act by clause 1(2).

23. Subsections (6) and (7) make additional amendments to section 20(1)(b) of the Credit Unions Act 1979 and section 1(9) of the Co-operatives and Community Benefit Societies Act 2003, again in order to reflect the amendments made to the 1965 Act by subsection (1).

Clause 2: Re-naming of Industrial and Provident Societies Acts 24. Clause 2 provides that the Acts listed in it may be cited by their respective new short titles, ie the Acts are re-named. The Industrial and Provident Societies Acts 1965, 1967 and 2002 are re-named the Co-operative and Community Benefit Societies and Credit Unions Acts 1965, 1967 and 2002 because they apply to credit unions. The Industrial and Provident Societies Acts 1975 and 1978 are re-named the Co-operative and Community Benefit Societies Acts 1975 and 1978 as they have no application to credit unions. The Friendly and Industrial and Provident Societies Act 1968 is re-named the Co-operative and Community Benefit Societies Act because it has not applied to Friendly Societies since extensive amendments to it were made in 1974.

Clause 3: Application of provisions relating to directors disqualification 25. Clause 3 inserts in the Company Directors Disqualification Act 1986 (“the CDDA”) a new section 22D. The aim of new section 22D is to apply the CDDA to industrial and provident societies.

26. New section 22D(1) defines “registered society” for the purposes of the section as a society registered or deemed to be registered under the 1965 Act.

27. New section 22D(2) applies the CDDA to industrial and provident societies by providing that the CDDA applies to registered societies as it applies to companies.

28. New section 22D(3) provides that references in the CDDA to certain terms relating to companies include references to the equivalent terms relating to industrial and provident societies. In particular, subsection 22D(3)(a) provides that references to a company include a registered society; and subsection 22D(3)(b) provides that references to a director or an officer of a company include a member of the committee or an officer of a registered society (as defined in section 74(1) of the 1965 Act). The aim of this is to make it possible to apply provisions of the CDDA originally drafted for companies to industrial and provident societies by setting out how certain references to concepts of company law are to be treated as including references to equivalent concepts of industrial and provident society law.

29. New section 22D(4) provides for certain modifications to the CDDA in its application to industrial and provident societies. The aim of this subsection is to make it possible to apply certain provisions of the CDDA to industrial and provident

5 These notes refer to the Co-operative and Community Benefit Societies and Credit Unions Bill as introduced in the House of Commons on 21 January 2009 [Bill 14] societies by modifying the provisions of the CDDA so that references to concepts of company law are read as including, or being replaced by, references to equivalent concepts of industrial and provident society law.

30. In particular, new section 22D(4)(a) provides that in section 2(1) of the CDDA the reference to striking off includes cancellation of the registration of a society under the 1965 Act. Section 2(1) of the CDDA refers to disqualification on conviction for an indictable offence in connection with, among other things, the striking off of a company. The reason for this provision is that cancellation of a society is equivalent to striking off of a company.

31. New section 22D(4)(b) provides that in sections 3 and 5 of the CDDA references to companies legislation shall be read as references to the legislation relating to registered societies. Section 3 concerns disqualification for persistent breaches of company legislation and section 5 concerns disqualification on summary conviction. Both sections contain references to companies legislation.

32. New section 22D(4)(c) provides that references to investigative material in section 8(1) of the CDDA shall be read as including (i) any report made under section 47 or 49(1) of the 1965 Act and (ii) any information, books, accounts or other documents obtained under section 48 of the 1965 Act. Section 47 of the 1965 Act provides for inspection of societies’ books and production of a report by an accountant or actuary by order of the FSA (which, as said above, is the registrar for industrial and provident societies). Section 49(1) of the 1965 Act provides for the appointment, on the application of a certain number of members of the society, of an inspector to examine into and report on the affairs of the society. Finally, section 48 of the 1965 Act provides that the Authority (the FSA) can require the society to produce to it books, accounts and other documents and to furnish information.

33. Section 8 of the CDDA deals with disqualification after investigations that a company can undergo pursuant to various enactments listed at section 8(1) of the CDDA, on the basis of investigative material produced as part of those investigations. Examples of investigations relevant for the purposes of section 8 of the CDDA are investigations under the Companies Act 1985 (Part 14) or under the Financial Services and Markets Act 2000 (sections 167, 168, 169 or 284).

34. Some (although not all) of the enactments referred to in section 8 of the CDDA apply to industrial and provident societies as well as companies, for example some of the provisions of the Financial Services and Markets Acts 2000 apply to industrial and provident societies that are authorised under that Act. However, at present section 8 of the CDDA contains no reference to the investigations (and related investigative materials) provided for in sections 47, 49(1) and 48 of the 1965 Act. The Bill adds references to those investigations, and related investigative material, in section 8 of the CDDA when applied to industrial and provident societies.

6 These notes refer to the Co-operative and Community Benefit Societies and Credit Unions Bill as introduced in the House of Commons on 21 January 2009 [Bill 14]

35. New section 22D(4)(d) provides that references to the registrar shall be read as references to the FSA. The reason for this is that the FSA is the registrar for industrial and provident societies.

36. New section 22D(4)(e) provides that references to shadow directors shall be disregarded. The reason for this is that there is no provision as to shadow directors in industrial and provident society law.

37. New section 22D(5) provides that in the application of Schedule 1 to the CDDA to members of the committee of a society (the equivalent of directors for industrial and provident societies) references to provisions of the Companies Act 2006 shall be read as including references to the corresponding provisions of the legislation relating to societies.

38. Schedule 1 to the CDDA lists the matters for determining the unfitness of directors for the purposes of section 9 of the CDDA. Section 9 relates to cases in which the Court has to determine whether a person’s conduct as a director makes him or her unfit to be concerned in the management of a company.

39. The matters listed in Schedule 1 to the CDDA are currently listed by reference to sections of the Companies Act 1985 and Companies Act 2006. The references to the Companies Act 1985, however, are shortly to be replaced by references to the Companies Act 2006 as part of the implementation of the Companies Act 2006. It is for this reason that new subsection 22C(5) only mentions references to provisions of the Companies Act 2006.

Clause 4: Power to apply certain other provisions relating to companies

40. Clause 4 gives the Treasury the power to apply to industrial and provident societies certain provisions relating to companies.

41. Subsection (1) provides that the Treasury can make secondary legislation (regulations) either applying, or making provisions equivalent to, certain provisions relating to companies, in either case with appropriate modifications.

42. Subsection (1) gives to the Treasury the flexibility to decide whether to apply existing provisions or to make new, equivalent provisions and, in either case, to make appropriate modifications. These powers will enable the Treasury to choose the most appropriate legislative technique to apply relevant provisions of company law to industrial and provident societies and to make modifications so as to adapt company law to the potentially different requirements of industrial and provident societies. For example, it is possible that the FSA, which is the registrar for industrial and provident societies, will take for industrial and provident societies some of the responsibilities that the Secretary of State has for companies in respect of investigations and ordering a change of name.

7 These notes refer to the Co-operative and Community Benefit Societies and Credit Unions Bill as introduced in the House of Commons on 21 January 2009 [Bill 14]

43. Subsection (2) lists the provisions relating to companies that the Treasury will be able to apply under subsection (1): Parts 14 and 15 of the Companies Act 1985 on investigations of companies; Part 5 of the Companies Act 2006 on company names; Part 31 of Companies Act 2006 on dissolution and restoration to the register.

44. Part 14 of the Companies Act 1985 gives the Secretary of State the power to investigate companies and their affairs and to requisition documents. Part 15 of the Companies Act 1985 makes provisions on certain restrictions that the Secretary of State may impose on shares and debentures that are the subject of an investigation. Parts 14 and 15 were amended, but not repealed, by the Companies Act 2006.

45. Part 5 of the Companies Act 2006 contains provisions about company names, including: general requirements on company names; indications of company type or legal form; similarity to other names (which includes provisions on powers by the Secretary of State to direct a company to change its name if it is similar to other names); other powers of the Secretary of State (for example powers to direct a change of name if the company provides misleading information in order to register by a particular name or if the name of the company gives a misleading indication of the company’s activities); change of name; trading disclosures.

46. Part 31 of the Companies Act 2006 contains provisions giving powers to strike defunct companies off the register of companies; setting out related procedures governing voluntary striking off and how such applications should be made; delineating when the property of a dissolved company is deemed to be bona vacantia and its operation, including the effect of Crown Disclaimer; and setting out procedures by which companies may be restored to the register and the effect of that restoration in relation to the company’s name and property deemed bona vacantia.

47. Subsection (3) provides that regulations made to apply provisions on investigations of companies in Parts 14 and 15 of the Companies Act 1985 may amend or repeal sections 47, 48 and 49 (in part) of the 1965 Act. These provisions in the 1965 Act cover areas in part similar to the areas covered by Parts 14 and 15 of the Companies Act 1985 for companies. It is possible that amendments to, or repeals of, these provisions, will result from the application of Parts 14 and 15 to industrial and provident societies. The purpose of subsection (3) is to make it clear that the Treasury’s powers include powers to amend or repeal these provisions.

48. Subsection (4) provides that regulations made to apply provisions on investigations of companies in Part 5 of the Companies Act 2006 may amend or repeal section 5 of the 1965 Act. This provision in the 1965 Act covers areas in part similar to the areas covered by Part 5 of the Companies Act 2006 for companies. It is possible that amendments to, or repeals of, this provision, will result from the application of Part 5 to industrial and provident societies. The purpose of subsection (3) is to make it clear that the Treasury’s powers include powers to amend or repeal this provision.

8 These notes refer to the Co-operative and Community Benefit Societies and Credit Unions Bill as introduced in the House of Commons on 21 January 2009 [Bill 14]

49. Subsection (5) provides that regulations made to apply provisions on Part 31 of the Companies Act 2006 may amend or repeal sections 16 (in part) and 59 of the 1965 Act. These provisions in the 1965 Act cover areas in part similar to the areas covered by Part 31 of the Companies Act 2006. It is possible that amendments to, or repeals of, these provisions, will result from the application of Part 31 to industrial and provident societies. The purpose of subsection (5) is to make it clear that the Treasury’s powers include powers to amend or repeal these provisions.

50. Subsection (6) provides that subsections (3) to (5) are not to be read as restricting the general power to make consequential amendments conferred by Clause 6 (see below). The purpose of this provision is to ensure that it is clear that the power to make amendments to existing legislation consequential upon any provision made under the Bill is not limited to the power to amend the provisions of the 1965 Act listed at subsections (3) to (5).

51. Subsection (7) provides that the regulations made by the Treasury to apply provisions of company law may (a) confer powers to make orders, regulations and other subordinate legislation; (b) create criminal offences; (c) provide for the charging of fees (but not any charge in the nature of taxation). The reason for this provision is that in order to apply certain provisions relating to companies as described in the paragraphs above, the Treasury may need to confer powers to make secondary legislation, create criminal offences or charge fees.

52. As an example of the potential need to confer powers to make secondary legislation, some of the provisions in Part 14 of the Companies Act 1985 concerning investigations of companies confer on the Secretary of State powers to make regulations in respect of various matters. It is possible that, in applying the provisions of Part 14 to industrial and provident societies, the Treasury will want to confer powers to make such regulation on themselves or the Secretary of State.

53. With regards to the potential need to create criminal offences, Part 14 of the Companies Act 1985, for example, provides for a number of criminal offences in connection with investigations of companies. The Treasury may want to create similar offences in connection with investigations of industrial and provident societies.

54. Finally, as to the charging of fees, for example, pursuant to section 437 of the Companies Act 1985, the Secretary of State may furnish a copy of a report of the investigation to various persons “on payment of the prescribed fee”. The Treasury may want to be able to prescribe such fee if this provision is applied in relation to industrial and provident societies, or give the Secretary of State the power to do so in relation to societies.

9 These notes refer to the Co-operative and Community Benefit Societies and Credit Unions Bill as introduced in the House of Commons on 21 January 2009 [Bill 14]

Clause 5: Power to make provisions corresponding to provisions applying to building societies

55. Subsection (1) inserts into the Credit Unions Act 1979 (“the 1979 Act”) a new section 23A. New section 23A(1) gives the Treasury power to amend that Act by regulations so as to make corresponding statutory provisions for credit unions to those applicable to building societies. The power is widely drawn to allow any provisions of building societies legislation deemed appropriate to be mirrored for credit unions.

56. New section 23A(2) restricts the power in new section 23A (1) by providing that sections of the 1979 Act covering registration, use of the name “credit union”, the general prohibition on deposit taking, amalgamations or transfers of engagements and conversion of status between credit union company cannot be modified.

57. New 23A(3) provides that the regulations made by the Treasury to apply provisions of building society law may (a) confer powers to make orders, regulations and other subordinate legislation; (b) create criminal offences; (c) provide for the charging of fees (but not any charge in the nature of taxation). The reason for this provision is that in order to apply certain provisions relating to building societies described in the paragraphs above, the Treasury may need to confer powers to make secondary legislation, create criminal offences or charge fees.

58. New section 23A(4) provides that the Treasury may by regulations make amendments to any enactment (including to those sections of the 1979 Act explicitly exempted from substantive amendment under new 23A (2)) as set out in new section 23A (4). This is to ensure that existing legislation can be modified to encompass any changes made under the new 23A(1).

59. The phrase “enactment” is given its usual definition in new section 23A (5).

60. New section 23(A)(6) imposes a requirement on the Treasury to consult when using the regulation-making power conferred by this section.

61. New section 23A(7) provides that changes to credit union law using this power are subject to the affirmative resolution procedure.

62. Sub-section (2) of the clause amends section 29(2) of the 1979 Act, which deals with parliamentary procedure to expressly differentiate between modifications made under the new section 23A, inserted by subsection (1), which requires the affirmative resolution procedure, and those made under other powers contained in the 1979 Act (negative resolution procedure). All regulations under this Bill are to be made by way of affirmative resolution procedure, as set out in Clause 7.

10 These notes refer to the Co-operative and Community Benefit Societies and Credit Unions Bill as introduced in the House of Commons on 21 January 2009 [Bill 14]

63. Sub-section (3) of the clause amends section 33(4) of the 1979 Act, which dealt with the application of the 1979 Act to Northern Ireland. The new subsection adds the new section 23A to the exceptions to the general provision that the 1979 Act does not extend to Northern Ireland.

Clause 6: Consequential amendments

64. Subsection (1) provides the Treasury with a power to make consequential amendments to other enactments in the light of the other provisions of the Bill. The standard definition of “enactments” is given in subsection (3).

65. Subsection (2) permits this power to be used to amend any enactment passed or made before commencement of the relevant clause in the Bill including provisions of the Bill apart from clause 6 itself. This ensures that any other legislation enacted before a particular clause comes into force may be amended to ensure that it is compatible with the provisions in this Bill or any legislation made under it (see clause 6(1).) This will ensure that even if implementation dates are delayed, legislation on the statute book as at the date of commencement will not clash with the new provisions. It is anticipated that the potentially complex secondary legislation which would be introduced under the powers conferred in clauses 3, 4 and 5 will necessitate consequential amendments to legislation.

66. Subsection (4) makes specific provision for the amendment of titles of subordinate legislation (see clause 2 above). This is done for the avoidance of doubt.

Clause 7: Regulations

67. This clause provides for the inclusion of ancillary provisions in regulations made under clauses 4, 5 and 6 and sets out relevant procedures.

68. Subsection (1) permits such regulations to include such supplementary, incidental and transitional provisions as may be necessary or expedient. This permits flexibility to make changes under this Bill to existing industrial and provident societies enactments with the minimum of disruption to the existing systems in place for industrial and provident societies and to make the transition from the existing system to the new system as smooth as possible.

69. Subsection (2) states that regulations must be made by way of , while subsection (3) requires all regulations made under the Bill to be made by way of the affirmative resolution procedure. It is appropriate for Parliament to be able to consider the detailed changes which the regulations will contain before they are made.

11 These notes refer to the Co-operative and Community Benefit Societies and Credit Unions Bill as introduced in the House of Commons on 21 January 2009 [Bill 14]

Clause 8: Short title, commencement and extent

70. Subsection (1) specifies the short title of the Act, once it receives Royal Assent.

71. Subsection (2) confers a standard commencement power on the Treasury. It permits different provisions to be commenced on different dates. Subsection (3) permits any commencement order to contain such transitional provisions as the Treasury deems necessary.

72. Subsection (4) clarifies the position on the extent of the Bill to Northern Ireland. As outlined at paragraph 5 above while the Bill will not directly extend to Northern Ireland this provision makes it clear that clauses 5 and 6, together with clauses 7(1) and (3), which relate to powers to make consequential amendments, will extend to Northern Ireland, where the underlying enactments being amended so extend.

73. Subsection (5) permits the Bill to be extended to the Channel Islands by way of an Order in Council. Any Order may make modifications to the Bill in its application to the Channel Islands. This is dealt with at paragraph 3 above.

FINANCIAL EFFECTS AND PUBLIC SERVICE MANPOWER

74. The Bill will neither entail additional public expenditure nor changes to public service manpower. There are no tax implications as the changes are in relation to rebranding and corporate governance.

REGULATORY IMPACT ASSESMENT

75. The Bill forms part of the Government’s wider review of the legislation for the mutuals sector. It seeks to improve the corporate governance standards of Industrial & Provident Societies, Community Benefit Societies and Credit Unions.

76. The Treasury has carried out an impact assessment summarised below.

77. The main costs relate to Government logistical costs in consulting, drafting and publishing documentation (Treasury, FSA and BERR) anticipated to be around £50,000. Costs relating to societies will merely be incidental such as possible change of inscriptions on correspondence and letter headed paper.

12 These notes refer to the Co-operative and Community Benefit Societies and Credit Unions Bill as introduced in the House of Commons on 21 January 2009 [Bill 14]

78. The main benefits arise from aligning credit union legislation with building society law whilst allowing for the protection in company law on such matters such as disqualification of directors, clarity in the new legislation and enhanced corporate governance. It is not possible to quantify these qualitative benefits.

COMMENCEMENT DATES

79. The Second Reading of the Bill is due on 24 April 2009. The commencement date for the Bill will be dependent on the Parliamentary timetable.

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