The Co-operative and Community Benefit Societies and Credit Unions (Investigations) Regulations 2014

Contents

1Citation, commencement and interpretation#

(1)These Regulations may be cited as the Co-operative and Community Benefit Societies and Credit Unions (Investigations) Regulations 2014 and come into force on 6th April 2014.

(2)In these Regulations, “the 1965 Act” means the Industrial and Provident Societies Act 1965.

(3)In these Regulations and in the provisions of the Companies Act 1985 applied by regulation 2, “registered society” means a society registered under the 1965 Act.

2Application of Part 14 of the Companies Act 1985 and subordinate legislation#

(1)The provisions of Part 14 of the Companies Act 1985 (investigation of companies and their affairs; requisition of documents) set out in the Table in paragraph (3) apply to registered societies with—

(a)the general modifications set out in paragraph (2);

(b)any other modification specified in the Table in paragraph (3); and

(c)any other necessary modification.

(2)Unless different provision is made in paragraph (3), in the provisions of Part 14 of the Companies Act 1985 applied by paragraph (3)—

(a)a reference to a committee is to be read as a reference to a committee within the meaning of section 74(1) of the 1965 Act;

(b)a reference to a company is to be read as a reference to a registered society;

(c)a reference to an officer of a company is to be read as a reference to an officer (within the meaning of section 74(1) of the 1965 Act ) of a registered society;

(d)a reference to the Secretary of State is to be read as a reference to the Financial Conduct Authority;

(e)a reference to a subsidiary is to be read as a reference to a subsidiary within the meaning of section 15 of the Friendly and Industrial and Provident Societies Act 1968.

(3)The provisions applying to registered societies, and the modifications, are as follows.

Table of applied provisions of Part 14 of the Companies Act 1985
Applied provision of the Companies Act 1985	Modification
Section 432 (other company investigations)	In subsection (3) omit “Subsections (1) and (2) are without prejudice to the powers of the Secretary of State under section 431; and”.Omit subsection (4).
Section 433 (inspectors’ powers during investigation)	In subsection (1) omit “431 or”.
Section 434 (production of documents and evidence to inspectors)	In subsection (1) omit “431 or”.In subsection (5) for “any of sections 431 to 433” substitute “section 432 or 433”.
Section 436 (obstruction of inspectors treated as contempt of court)
Section 437 (inspectors’ reports)	In subsection (1A) omit “431 or”.Omit subsection (2A).In subsection (3)(b), “prescribed” means prescribed by regulations made by the Secretary of State.In subsection (3)(b) omit sub-paragraph (iv).
Section 439 (expenses of investigating a company’s affairs)	In subsection (1), for “an investigation under any of the powers conferred by this Part” substitute “an investigation under, or exercise of any other powers conferred by, this Part”.For subsection (4) substitute—4 A registered society dealt with by an inspector’s report is liable except in so far as the Financial Conduct Authority otherwise directs.After subsection (4) insert—4A The Financial Conduct Authority may, if it considers it just, direct that a registered society is liable for all or any part of the expenses incurred by the Authority or a person authorised by the Authority for the purposes of section 447, 448 or 453A.In subsection (6) for “subsection (4) or (5)” substitute “subsection (4)”.In subsection (8) for “subsections (4) and (5)” substitute “subsection (4)”.Omit subsections (5), (9) and (10).
Section 441 (inspectors’ report to be evidence)	In subsection (1) the reference to section 8 of the Company Directors Disqualification Act 1986 includes a reference to section 8 as applied by section 22E of that Act.
Section 446A (general powers to give directions)	In subsection (2) omit “431,” and “or 442(1)”.
Section 446B (direction to terminate investigation)	In subsection (2), omit “or 442(3)”.
Section 446C (resignation and revocation of appointment)
Section 446D (appointment of replacement inspectors)
Section 446E (obtaining information from former inspectors etc.)
Section 447 (power to require documents and information)
Section 447A (information provided: evidence)
Section 448 (entry and search of premises)
Section 448A (protection in relation to certain disclosures: information provided to Secretary of State)
Section 449 (provision for security of information obtained)	In subsection (3), the reference to the Secretary of State is to be read as a reference to the Secretary of State, and not as a reference to the Financial Conduct Authority.In subsection (6A)(b)(ii) omit “or Northern Ireland”.
Section 450 (punishment for destroying, mutilating etc. company documents)	Omit subsection (1A).In subsection (3)(b)(ii) omit “or Northern Ireland”.
Section 451 (punishment for furnishing false information)	In subsection (2)(b)(ii) omit “or Northern Ireland”.
Section 451A (disclosure of information by Secretary of State or inspector)	Omit subsection (5).
Section 452 (privileged information)	In subsection (1) for “431” substitute “432”.In subsection (1A) omit “, 443 or 446”.In subsection (1B) omit “431,”.In subsection (4) omit paragraph (a).
Section 453A (power to enter and remain on premises)	In subsection (7) omit “431,” and “or 442”.
Section 453B (power to enter and remain on premises: procedural)	In this section, “prescribed” means prescribed by regulations made by the Secretary of State.
Section 453C (failure to comply with certain requirements)
Section 453D (offences by bodies corporate)
Schedule 15C (specified persons to whom disclosure can be made for the purposes of section 449)	In paragraph 1, the reference to the Secretary of State is to be read as a reference to the Secretary of State, and not as a reference to the Financial Conduct Authority.After paragraph 10 insert—11 The Charity Commission.12 The Office of the Scottish Charity Regulator.13 The Homes and Communities Agency.14 The Scottish Housing Regulator.15 The Welsh Assembly Government.
Schedule 15D (disclosures for the purposes of section 449)	In paragraph 2, an inspector appointed under Part 14 includes an inspector appointed under Part 14 as applied by these Regulations.In paragraph 3, a person authorised under section 447 includes a person authorised under section 447 as applied by these Regulations.

(4)The Companies (Inspectors’ Reports) (Fees) Regulations 1981 apply for the purposes of section 437 of the Companies Act 1985 as applied by this regulation.

(5)The Companies Act 1985 (Power to Enter and Remain on Premises: Procedural) Regulations 2005 apply to registered societies with the general modifications set out in paragraph (2).

3Condition for exercise of powers in regulation 2#

In deciding whether and how to exercise the powers conferred by regulation 2, the Financial Conduct Authority must adopt an approach which is based on the principle that those powers should be exercised only to the extent necessary to maintain confidence in registered societies.

4Amendment to the Industrial and Provident Societies Act 1965#

Section 48 of the 1965 Act (production of documents and provision of information for certain purposes) is repealed.

5Consequential amendment to section 17 of the Credit Unions Act 1979#

For section 17 of the Credit Unions Act 1979 (power to require information) substitute—“17 1 The FCA or PRA may by notice in writing require a credit union or an officer or former officer of a credit union—a to produce to it such books, accounts and other documents relating to the credit union’s business, andb to provide it with such other information relating to that business,as it considers necessary for the exercise of its functions under this Act.2 The notice must be served on the credit union or other person.3 The notice may contain a requirement that any information provided in accordance with the notice is to be verified by a statutory declaration.4 A credit union or other person who fails to comply with a notice under this section commits an offence.5 A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale.17A 1 This section applies where the FCA or PRA has exercised its powers under section 17 in relation to a credit union.2 The FCA or PRA may, if it considers it just to do so, direct that the expenses incurred by it in exercising the powers (or any part of those expenses) are to be met—a out of the credit union’s funds, orb by the credit union’s officers or former officers (or any of them).3 Any sum which the credit union or other person is required by a direction to pay is a debt due from the credit union or person to the FCA or PRA.”

6Consequential amendment to the Company Directors Disqualification Act 1986#

In section 22E(4)(c)(ii) of the Company Directors Disqualification Act 1986 (application of Act to societies registered under the 1965 Act) for “section 48 of the 1965 Act” substitute “Part 14 of the Companies Act 1985 as applied by the Co-operative and Community Benefit Societies and Credit Unions (Investigations) Regulations 2014”.

7Consequential amendment to the Community Benefit Societies (Restriction on Use of Assets) Regulations 2006#

In Schedule 2 to the Community Benefit Societies (Restriction on Use of Assets) Regulations 2006 (application of the 1965 Act with modifications), omit paragraph 3.

8Transitional provision#

In relation to an offence committed before the commencement of section 280 of the Criminal Justice Act 2003, section 17(5) of the Credit Unions Act 1979 (as substituted by regulation 5) has effect with the addition after “standard scale” of “or to imprisonment for a term not exceeding 3 months (or both)”.

Contains public sector information licensed under the Open Government Licence v3.0.