Progress is being made on efforts to change Australian law to help mutuals raise working capital so they can fund growth and development, it has been reported.
The Business Council of Co-operatives and Mutuals (BCCM) has been lobbying for key reforms to the Corporations Act and this month held a round table with Martin Stewart, director of banks, building societies and credit unions at the Bank of England’s Prudential Regulation Authority.
The UK has brought in changes similar those sought by the BCCM in Australia, enabling mutuals to issue securities that fit with their ethos.
The focus on capital among Australian mutuals follows findings of the Senate Economics References Committee’s inquiry into co-ops, mutuals and member-owned firms, which found that the options for co-operative and mutual enterprises to raise capital was curtailed by the regulatory and legislative environment.
The Senate Committee made several recommendations to create a more level playing field between mutuals and investor-owned entities with respect to capital.
Mr Stewart is responsible for the prudential supervision of UK banks, building societies and credit unions at the Bank of England and oversaw the introduction, at a regulatory level, of legislation to permit new capital instruments to be issued by UK deposit taking mutuals.
The BCCM has also been consulting Mutuo, the British thinktank and advocate group for mutuals, on the campaign.
After the UK reforms went through, Mutuo said on its website: “If mutuals and co-operatives are to work in an environment where they can truly compete, then similar kinds of reforms will need to be considered by governments in other countries.”
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