The Financial Services Act 2012 (Mutual Societies) Order 2013

• Citation: S.I. 2013/496
• Sections: 249

Section 1 Citation and commencement

(1) This Order may be cited as the Financial Services Act 2012 (Mutual Societies) Order 2013 and, comes into force on 1st April 2013.

Section 2 Transfer of functions to the Financial Conduct Authority and the Prudential Regulation Authority

The following Schedules to this Order have effect—

(a) Schedule 1 (which provides for the application of FSMA 2000 to the functions made exercisable by the FCA and the functions transferred to the PRA by Schedules 2 to 10);

(b) Schedules 2 to 10 (which amend certain enactments relating to mutual societies so as to make functions of the Financial Services Authority exercisable by that body corporate as the FCA and to transfer functions of the Financial Services Authority to the PRA);

(c) Schedule 11 (which makes amendments consequential on Schedules 2 to 10);

(d) Schedule 12 (which makes transitional provision).

Section 1

In this Schedule—

(a) “mutuals expenditure” means expenditure of the FCA or the PRA incurred—

(i) in carrying out functions which are conferred by the legislation relating to mutual societies or are otherwise exercisable by virtue of this Order;

(ii) for any purpose incidental to or in connection with the carrying out of such functions (including expenditure incurred before 1st April 2013 in preparation for the assumption of those functions); and

(b) any reference to a section or Schedule is a reference to FSMA 2000.

Section 2

(1) For the purposes of the provisions specified in sub-paragraph (2), functions transferred by this Order are to be treated as functions conferred on the FCA under a provision of FSMA 2000.

(2) The provisions are—

(a) section 1A(3) and Schedule 1ZA (which make general provision in relation to the FCA and its functions);

(b) section 1S (reviews);

(c) section 3D (duty of FCA and PRA to ensure co-ordinated exercise of functions);

(d) section 3E (memorandum of understanding);

(e) sections 3I to 3K (power of PRA to restrain proposed action by FCA);

(f) section 139A (power of the FCA to give guidance); and

(g) section 415 (jurisdiction in civil proceedings).

Section 3

(1) For the purposes of the provisions specified in sub-paragraph (2), functions transferred by this Order are to be treated as functions conferred on the PRA under a provision of FSMA 2000.

(2) The provisions are—

(a) section 2A(3) and Schedule 1ZB (which make general provision in relation to the PRA and its functions);

(b) sections 2B to 2I (the PRA’s general duties);

(c) section 2O (reviews);

(d) sections 3D (duty of FCA and PRA to ensure co-ordinated exercise of functions);

(e) section 3E (memorandum of understanding); and

(f) sections 3I to 3K (power of PRA to restrain proposed action by FCA).

Section 4

As it applies by virtue of paragraphs 2(2)(e) and 3(2)(f), section 3I (power of PRA to require FCA to refrain from specified action) is to be read as if—

(a) the references in subsection (2) of that section to regulatory powers were references to the functions transferred by this Order; and

(b) subsections (2)(b) and (3) of that section were omitted.

Section 5

(1) The FCA must maintain arrangements designed to enable it to determine whether persons are complying with requirements imposed on them by or under—

(a) the legislation relating to mutual societies;

(b) the Industrial and Provident Societies Act 1975 ;

(c) the Industrial and Provident Societies Act 1978 .

Section 6

(1) This paragraph applies if the FCA makes, or proposes to make, rules under paragraph 23 of Schedule 1ZA (the Financial Conduct Authority: fees) which require the payment to the FCA of fees which relate in whole or in part to mutuals expenditure.

(2) In the application of paragraph 23 of Schedule 1ZA to the rules, the reference to fees and charges provided for by any other provision of FSMA 2000 includes a reference to fees and charges provided for by any provision of the legislation relating to mutual societies.

(3) To the extent that the fees relate to mutuals expenditure—

(a) section 138I(2)(d) (requirement for draft rules to be accompanied by an explanation of the FCA’s reasons for believing that making the proposed rules is compatible with section 1B(1)) does not apply in relation to the rules; and

(b) the rules are not to be treated as a “regulating provision” within the meaning of section 140A(1) (interpretation of Chapter 4 of Part 9A (competition scrutiny)).

Section 7

(1) This paragraph applies if the PRA makes, or proposes to, make rules under paragraph 31 of Schedule 1ZB (the Prudential Regulation Authority: fees) which require the payment to the PRA of fees which relate in whole or in part to mutuals expenditure.

(2) In the application of paragraph 31 of Schedule 1ZB to the rules, the reference to fees and charges provided for by any other provision of FSMA 2000 includes a reference to fees and charges provided for by any provision of the legislation relating to mutual societies.

(3) To the extent that the fees relate to mutuals expenditure, the rules are not to be treated as a “regulating provision” within the meaning of section 140A(1).

Section 8

Sections 139A(3) (power of FCA to give guidance) and 139B(5) (notification of FCA guidance to the Treasury) apply to guidance given to building societies, friendly societies and industrial and provident societies generally or to a class of such societies.

Section 9

(1) This paragraph applies if guidance is given by the FCA under section 139A on the operation of a rule of the kind mentioned in paragraph 6 above.

(2) To the extent that the fees required to be paid by the rule relate to mutuals expenditure, the guidance is not to be treated as a “regulating provision” within the meaning of section 140A(1).

Section 10

(1) This paragraph applies if general guidance is given by the FCA under section 139A with respect to any matter relating to functions exercisable under, or to any provision of or made under, the legislation relating to mutual societies, unless paragraph 8 above applies.

(2) The guidance is not to be treated as a “regulating provision” within the meaning of section 140A(1).

Section 1

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Section 2

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Section 3

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Section 4

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Section 5

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Section 6

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Section 7

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Section 8

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Section 9

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Section 10

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Section 11

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Section 12

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Section 13

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Section 14

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Section 15

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Section 16

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Section 17

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Section 18

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Section 19

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Section 1

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Section 2

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Section 3

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Section 4

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Section 5

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Section 1

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Section 2

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Section 3

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Section 4

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Section 5

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Section 6

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Section 7

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Section 8

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Section 1

The Friendly Societies Act 1974 is amended as follows.

Section 2

(1) In the provisions listed in sub-paragraph (2)—

(a) for “Authority” substitute “FCA”; and

(b) for “Authority’s” substitute “FCA’s”.

(2) The provisions are—

(a) section 12(1) (establishment of new branches);

(b) section 15A(1) (acknowledgement of registration and rules of new branch);

(c) section 16 (appeals from refusal to register);

(d) section 18 (registration of amendments of rules of society or branch);

(e) section 19 (acknowledgement of registration of amendment of rules);

(f) section 20 (appeals from refusal to register amendment of rule);

(g) section 24 (trustees of registered societies and branches);

(h) section 43 (annual return);

(i) section 55(1) (power of the Public Trustee to hold securities of certain friendly societies and branches);

(j) section 81(1) (power to change name);

(k) section 82(5) (amalgamation and transfer of engagements);

(l) section 84(2) and (3) (conversion of registered societies into companies);

(m) section 84A(6) (conversion of registered societies into industrial and provident societies);

(n) section 85(3) and (4) (conversion of society into branch);

(o) section 86(3) and (4) (meaning and registration of special resolutions);

(p) section 91(1A), (2), (3) and (5) (cancellation and suspension of registration);

(q) section 94(4) and (7) (instrument of dissolution);

(r) section 99(6) (punishment of fraud, etc, and recovery of property misapplied);

(s) section 101(1) and (1A) (prosecution of offences, recovery of costs or expenses);

(t) section 104A (fees for inspection or copying of documents);

(u) section 109(1)(b) and (d) (regulations);

(v) section 110(1) and (3) (evidence and deposit of documents);

(w) section 111(3) (interpretation: seal); and

(x) paragraphs 7 and 15 of Schedule 2 (matters to be provided for by the rules of societies registered under this Act).

Section 3

In section 30A(11) (publication of accounts and balance sheets), for “Authority” substitute “appropriate authority”.

Section 4

In section 32 (audit of exempt societies and branches), for “Authority”, in each place, substitute “appropriate authority”.

Section 5

In section 32A(4) and (5) (power of societies to disapply section 31 (obligation to appoint auditors)) , for “Authority”, in each place, substitute “appropriate authority”.

Section 6

(1) Section 39C (power to require accounts of past years to be audited) is amended as follows.

(2) In subsection (1), for “Authority”—

(a) in the opening words of that subsection, substitute “appropriate authority”; and

(b) in paragraph (b), in each place, substitute “FCA and, if the registered society or branch is a PRA-authorised person, the PRA”.

(3) In subsection (2), for “Authority” substitute “appropriate authority”.

(4) In the heading, for “Authority’s power” substitute “Power of appropriate authority”.