Mutuals Deferred Shares Act
The Mutuals' Deferred Shares Act received royal assent in the House of Lords yesterday evening.
This was only possible because of the dedicated support from Lord Naseby and Jonathan Evans MP, as well as the commitment of the Treasury to ensure the Bill progressed swiftly enough through the parliamentary process.
AFM met with Treasury earlier this month to explore how to maintain momentum: before mutual insurers can begin to create new share capital there is a need for secondary legislation and regulatory approval. Treasury has agreed to convene a working group with a range of interested parties, so that by the time the next Treasury Minister is appointed, there is a clear picture of how the shares will operate.
The range of discussions will include ensuring the shares count as regulatory capital, enabling retail consumers to buy the shares, determine how small as well as larger mutuals might take advantage of the shares, how the new capital opportunities available to the sector can contribute to a stronger mutual market more generally.
Commenting today, LV= chairman Mark Austen said: “We hope this marks a turning point in the legislative and regulatory attitude towards these ownership models to ensure their further development as an important and diverse part of the financial services industry.”
Royal Assent was granted during the prorogation process, marking the end of the parliamentary term. During the same session, the Deregulation Act was given Royal Assent, which includes the legislation necessary to permit the transfer, from 6 April 2015, of Child Trust Fund accounts to Junior ISAs.