Co-operatives, Mutuals and Friendly Societies Act 2023

Power to restrict use of assets of relevant mutual entities

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• (1) The Treasury may by regulations made by statutory instrument make provision for enabling a relevant mutual entity to ensure that—

• (a) assets of the entity of a prescribed kind,

• (b) assets of the entity specified by it in accordance with the regulations, or

• (c) all of the entity's assets,

cannot be used or dealt with except in a case mentioned in subsection (2).

• (2) The cases are—

• (a) where the use or dealing is, directly or indirectly, for a purpose for which the activities of the mutual entity are carried on and is of a prescribed kind, or

• (b) where the circumstances are such as may be prescribed.

• (3) A mutual entity is “relevant” if it is of a prescribed description.

• (4) In this section “dedicated assets” means assets in respect of which regulations under this section have been made.

• (5) Regulations under this section may, in particular—

• (a) provide for the procedure by which a relevant mutual entity may impose, or otherwise secure, a restriction on how dedicated assets are used or dealt with;

• (b) provide for such of a relevant mutual entity's rules as are of a prescribed kind to be unalterable, or for them to be alterable only in prescribed circumstances or in circumstances specified in rules of a prescribed kind;

• (c) provide for the case mentioned in subsection (2)(a) to be subject to such exceptions as may be prescribed;

• (d) provide that, in any circumstances prescribed under subsection (2)(b), dedicated assets must be dealt with in a prescribed way;

• (e) make provision for ensuring that a person to whom dedicated assets are transferred in prescribed circumstances cannot use or deal with those assets except in a case mentioned in subsection (2);

• (f) provide for members of a mutual entity who lose property rights as a result of regulations under this section to be compensated for that loss (whether by payment of a prescribed amount or of an amount determined in a prescribed way or otherwise), subject to such exceptions as may be prescribed;

• (g) provide for the enforcement of restrictions imposed as a result of regulations under this section;

• (h) make provision for the carrying out of investigations by persons appointed by a prescribed person;

• (i) confer power on a prescribed person to require persons of a prescribed description to provide the prescribed person with information in order to enable or assist that person to perform any of the person's functions under the regulations;

• (j) provide for restrictions on the use and disclosure of information obtained by any person in the performance of any function under the regulations.

• (6) Regulations under this section may—

• (a) impose criminal liability;

• (b) confer functions on a prescribed person;

• (c) confer jurisdiction on any court;

• (d) authorise a prescribed person to make rules, binding on persons of a prescribed description, for the purpose of enabling or assisting the prescribed person to perform any of the person's functions under the regulations;

• (e) make provision as to the making, publication and enforcement of such rules;

• (f) provide for a prescribed person to charge fees sufficient to meet the costs of performing any of the person's functions under the regulations;

• (g) modify, exclude or apply (with or without modifications) any provision made by or under an enactment or any rule of law;

• (h) contain such incidental, consequential and supplementary provision as the Treasury consider appropriate;

• (i) make different provision for different cases.

• (7) Regulations under this section may not create any new criminal offence punishable with imprisonment for more than 7 years.

• (8) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.

• (9) In this section—

• “mutual entity” means— a co-operative society, a friendly society with the meaning of the Friendly Societies Act 1992 (see section 116 of that Act), or a body corporate that carries on a business of mutual insurance;

• “co-operative society” means— a society registered as a co-operative society under the Co-operative and Community Benefit Societies Act 2014, or a pre-commencement society (within the meaning of that Act) that meets the condition in section 2(2)(a)(i) of that Act;

• “enactment” includes an enactment comprised in an Act of the Scottish Parliament;

• “prescribed” means prescribed by regulations under this section.

Short title

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This Act may be cited as the Co-operatives, Mutuals and Friendly Societies Act 2023.