Find out what the Community Shares Standard Mark means for you as an investor in a community share offer.
What is the Community Shares Standard Mark?
The Standard Mark has been developed by the Community Shares Unit, with the support of the Financial Conduct Authority (FCA). The FCA does not approve or regulate community share offers that are exempt from the Financial Promotions Regulations. If you invest in community shares you have no right of complaint to the Financial Ombudsman or access to the Financial Services Compensation Scheme.
Societies that apply for the Mark are assessed by a licensed practitioner who is accredited by the Community Shares Unit. They assess the offer document, application form, the model rules of the society, and supporting evidence such as the annual accounts and business plan. They decide whether the offer is in line with best practice.
The Standard Mark is not a guarantee that the business will be a success. You could still lose some or all of the money you invest. It does not give you any right to financial compensation if things go wrong. The main reason most people buy community shares is to support the business and its community purpose. If you want to buy shares for purely financial reasons you may want to consult a financial adviser.
Concerned about the Standard Mark award?
Once you have invested in a community share offer, you become a member of that society which gives you certain rights.
If you have any concerns, get in touch with the society. It is important that you contact the society first and give them a chance to deal with the problem. Societies are required to respond to queries and complaints from members within four weeks.
There are three main potential issues relating to offer documents bearing the Community Shares Standard Mark:
The offer document misses out important information
The information in the offer document is purposefully wrong
The offer document is confusing or misleading in some important way
If the society fails to respond to your complaint within a reasonable timescale, or you are unhappy with the response they have given, you can ask us to look at your complaint.
If you feel that the society hasn’t dealt with your complaint fairly, we can look into the problem for you. Please email [email protected]. We can speak to the practitioner who awarded the mark, let you know what we find out, and what we can do to put things right. We aim to respond within eight weeks of receiving a complaint.
The Community Shares Unit welcomes any complaint regarding community shares, but it can only take action if the society has been awarded the Community Shares Standard Mark. The Mark should be displayed clearly on the offer document.
The Financial Conduct Authority, the body responsible for registering societies, maintains a public register of all societies. It has the powers to carry out inspections and investigations into a society at the request of the society’s members and has the ultimate power to sanction the management or even to de-register the society.
The Money Advice Service is an independent service set up by government that provides free and impartial advice on money matters. Its website includes a page on community shares.