Co-operatives UK calls for members to respond to FCA consultation

Co-operatives UK, the UK’s sector body, is calling for its members to respond to the Financial Conduct Authority‘s consultation on how co-operatives should be regulated.

Last year the FCA asked societies and individuals to respond to its proposals on what makes a co-operative, and in June published draft guidance on its views on the setting of interest rates, its concept of a ‘bona fide co-operative society’ and its names policy.

The registrar asked for comments on the draft guidance, to be received by 14 August.

“There are now big areas of agreement between ourselves and the FCA, but there are also significant refinements to the detail needed to get the regulatory approach right,” said a statement from Co-operatives UK.

“We have now had detailed input from members and have put together a template response that co-operatives can use to submit to the FCA.”

In its first draft, the registrar’s original definition of a co-operative excluded consumer retail societies and worker co-operatives; this has been replaced by a focus on the wording of the ICA Statement of Co-operative Identity. “We find much to support in the FCA’s proposals,” says Co-operatives UK, “although we differ on the importance and utility of the Definition, and how the principles should be used in relation to it in a statutory test.

“We propose that the three parts of the ICA definition covering mutual purpose, ownership, and control should comprise the three parts of the FCA’s statutory test, with all seven ICA Principles adopted as guidelines for the use of both societies and the FCA.”

On the proposed indicators for interest rates, Co-operatives UK adds that while it “likes the FCA’s proposed indicator-based approach for assessing interest rates paid on member share capital,” it has “proposed some amendments to the indicators, so that they allow for greater flexibility in method for limiting returns and do not presuppose sacrifice on the part of members below what is fair and competitive”.

For the FCA’s full draft guidance document, and details of how to respond directly by 14 August, visit: www.fca.org.uk/your-fca/documents/guidance-consultations/gc15-04

Alternatively, Co-operatives UK has prepared a response template on behalf of its members: www.uk.coop/promoting-co-ops/influencing-policy/regulation