In a move that has caught everyone on the hop before Christmas, the Treasury yesterday (19 December) laid before Parliament the legislation that will transfer the registry of industrial and provident societies away from Northern Ireland to the Financial Conduct Authority. Once the legislation is passed the transfer will take place on 6 April 2018.
We know this transfer of service is unpopular with some of members in Northern Ireland who are concerned about issues such as the introduction of the FCA's annual fees and the detachment of the Canary Wharf-based FCA from the mutual economy in Northern Ireland.
We had pressed for an open consultation and a full impact assessment but the Department for the Economy and the Treasury have been determined to press ahead, driven by what essentially comes down to budgetary imperatives. A decision has been made that the dis-economies of scale involved in Northern Ireland retaining its own registry service are too costly to continue.
Because the move is controversial Co-operatives UK has been keen for the process to be smooth and clear for societies ahead of the planned April 2018 transfer.
Unfortunately so far it’s all been rather confused and chaotic. We'd had assurances from the Department for the Economy that it would provide societies with clear and timely information about the transfer and were pleased to hear that FCA officials planned to visit Northern Ireland early on to meet societies and discuss the issues.
Instead, the first official reference of the transfer appeared in the detail of an obscure FCA paper on regulatory fees, with no explanatory information whatsoever. At the same time the Department for the Economy was told by the Treasury that the transfer had been put on hold, with no new timescale in place. Thus the planned written notice from the Department to societies never came. We were told by the Treasury that the legislation to make the transfer had been withdrawn with no immediate plans for its reintroduction. No clear reason was given. Then last night both we and the Department for the Economy were surprised to be informed that the legislation had been laid and the transfer was back on its original timetable.
Whatever is responsible for the double u-turn in Treasury, the resultant confusion for societies, who have been drip-fed contradictory snippets since the summer, it is not good enough. Rest assured that we are calling on the government institutions involved to provide a smoother, clearer transfer process between now and April.
- Unlike the Department for the Economy, which charges societies fees for every transaction they make with the registrar, the FCA will charge all societies annual fees ranging from £65 to £480 depending on their turnover. For details of the precise fees your society will pay see page 25 of this paper
- The FCA charges between £40 and £950 to register a new society, depending on how much an applicant diverges from model rules, whereas the Department for the Economy charges £535 for bespoke applications and £200 to register with model rules
- The FCA charges £12 for every access of documents (annual returns, mortgage data) on its Mutuals Register, whereas the Department for the Economy makes these available free of charge
- From April 6 2018 Industrial and Provident Societies will be renamedCo-operative and Community Benefit Societies and the distinction between the types of society will become more pronounced
- The FCA has a codified regulatory policy for societies in Great Britain that we expect to be applied to Northern Ireland, with changes to reflect the differences in law
- The FCA Mutuals Team is wholly independent from Treasury and will have the same independence from the Northern Ireland government
Note that Co-operatives UK is pressing for wholesale improvements to the service societies receive from the FCA. We want societies to be given a digital online portal for registering and filing, fees more comparable with those charged to community interest companies and information on the Mutuals Register to be free to access. We continue to make the case directly to the FCA and in Whitehall.
If you have any questions please do not hesitate to contact our policy officer, James Wright.