The Financial Services and Markets Act 2000 (Mutual Societies) Order 2001

Explanatory Note

(This note is not part of the Order)

Part XXI of the Financial Services and Markets Act 2000 (c. 8) (“the 2000 Act”) provides for the transfer, to the Financial Services Authority (“the Authority”) or to the Treasury, of functions of the Friendly Societies Commission, the Building Societies Commission, and the Registry of Friendly Societies (specifically the Chief Registrar of Friendly Societies, the central office of the registry of friendly societies, the assistant registrar of friendly societies for Scotland, and the other assistant registrars). The functions of the Registry extend not only to friendly societies but also to other kinds of registered society registered under the Friendly Societies Act 1974, as well as building societies, industrial and provident societies and credit unions.

Article 4 of this Order effects the transfer of these functions. Those listed in Schedule 1 (mostly powers to make legislative provision through regulations or orders) are transferred to the Treasury, whilst all other functions are transferred to the Authority subject to any contrary provision made by or under the 2000 Act. Schedule 2 makes provision as to the way in which provisions in the 2000 Act (in particular provisions referring to functions of the Authority) will apply to the Authority when exercising the functions transferred to it.

The transfer of functions takes effect when the Order comes fully into force (“commencement”), at the same time as the general prohibition in section 19 of the 2000 Act. However Schedule 2 and article 8 of the Order come into force earlier on the 17th August 2001. Article 8 permits the Treasury and the Authority to make rules, regulations and orders and give directions in advance, in order to come into force at commencement.

Article 5 contains general consequential and transitional provisions in relation to transferred functions. Article 6 contains deals specifically with the situation where, at commencement, a person has not yet complied with a requirement imposed on him, or exercised an entitlement which he has, to provide a document or other information. For example this would cover the situation where a society’s annual return or accounts have not been provided before commencement. In such situations the document or information is to be provided to the Authority, along with any related fee. Article 7 updates non-statutory provisions, such as the rules of mutual societies, which relate to transferred functions.

Articles 9 to 12 provide for the dissolution of the bodies and office-holders whose functions are transferred, and of the Building Societies Investor Protection Board set up under the Building Societies Act 1986 (c. 53).

Article 13 gives effect to the amendments and repeals contained in Schedules 3 and 4, subject to the transitional provisions and savings contained in Schedule 5 and to any other such provisions made under the 2000 Act. Further amendments and repeals to the legislation relating to mutual societies are contained in Schedules 18, 20 and 22 to the 2000 Act itself.