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      • Industrial & Provident Societies

 

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Co-operatives UK

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An industrial and provident society is an organisation conducting an industry, business or trade, either as a co-operative or for the benefit of the community, and is registered under the Industrial and Provident Societies Act 1965.

The FSA is the registering authority for societies which register under the Industrial and Provident Societies Act 1965 (I&P Act 1965). This registration function is separate from our role as regulator of the financial services industry in the UK, as provided by the Financial Services and Markets Act 2000 (FSMA) and the statutory instruments made under FSMA.

Most I&P Act 1965 societies are not regulated by the FSA under FSMA. Members of these societies will not have access to the Financial Ombudsman Service (FOS) or the Financial Services Compensation Scheme (FSCS). However, members of societies which are both registered under the I&P Act 1965 and regulated by the FSA - because they are authorised to conduct financial services business under FSMA - will have access to FOS and the FSCS.

A Society is responsible for considering whether any of its activities are regulated activities under section 19 of the Financial Services and Markets Act 2000. If any of its activities are regulated activities, the Society must either rely on exemptions¹ or apply for authorisation from the FSA for the conduct of such activities. The registration of a rule relating to a regulated activity does not provide the necessary authorisation – there is a separate application process for authorisation.

Co-operative societies are run for the mutual benefit of their members, with any surplus usually being ploughed back into the organisation to provide better services and facilities.

Societies run for the benefit of the community provide services for people other than their members. There need to be special reasons why the society should not be registered as a company.

¹ as, for example, set out in:
• the 'Financial Services and Markets Act 2000 (Regulated Activities) Order 2001'; and
• the 'Financial Services and Markets Act 2000 (Carrying on Regulated Activities By Way of Business) Order 2001'.
This is not an exhaustive list.

Is your society an Industrial and Provident Society?

If your society's register number ends in an 'R' or 'RS' then the society will be an industrial and provident society. Your society's own rulebook should also clarify the matter. You can also use the FSA Mutuals Register to check the 'Registration Act' for your society.

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