Mutuals’ Redeemable and Deferred Shares Bill [HL]

Page 1, line 3, leave out subsections (1) and (2) and insert—

“(1)     The Treasury may by regulations make provision to permit or facilitate the
issue of deferred shares by a friendly society or mutual insurer.

(2)     “Deferred shares” are instruments that—

(a)   are issued by a friendly society or mutual insurer (“the issuer”) with
the consent of the appropriate authority,

(b)   can be transferred but not withdrawn,

(c)   prohibit repayment of principal other than—

(i)   on the winding up or dissolution of the issuer where all
other sums due from the issuer to creditors claiming in the
winding up or dissolution are paid in full, or

(ii)   where the appropriate authority has consented to the
repayment, and

(d)   have such characteristics as are specified in regulations made by the
Treasury under this paragraph.

(2AA)    Regulations under subsection (1) may modify any of the following—

(a)   the Friendly Societies Act 1992 (as amended from time to time);

(b)   the Companies Act 2006 (as amended from time to time);

(c)   any other primary legislation relating to friendly societies or
mutual insurers (whenever passed);

(d)   any instrument made under the legislation mentioned in any of
paragraphs (a) to (c) (whenever made).

(2AB)    Regulations under subsection (1)—

(a)   may not make provision that would permit or facilitate the issue of
deferred shares by a friendly society or mutual insurer where it is
not authorised to do so by its memorandum, rules or constitution;

(b)   may make consequential, supplementary, incidental, transitional or
saving provision;

(c)   may make different provision for different purposes.

(2CC)    A deferred share issued by virtue of regulations made under subsection (1)
is not a share within the meaning of the Companies Acts.”

Page 2, line 22, leave out “Act” and insert “section”

Page 2, line 23, leave out “and must” and insert—

“( )     A statutory instrument containing regulations under this section may”

Lord Deighton gives notice of his intention to oppose the Question that Clause 2 stand part
of the Bill.

Lord Deighton gives notice of his intention to oppose the Question that Clause 3 stand part
of the Bill.

Lord Deighton gives notice of his intention to oppose the Question that Clause 4 stand part
of the Bill.

Leave out Clause 5 and insert the following new Clause—

“Restriction on voting rights

(1)     Regulations under section 1(1) must make provision to ensure that no
friendly society or mutual insurer will confer—

(a)   more than one vote per person as a member on holders of deferred
shares who are members of the society or insurer by virtue only of
being such a holder;

(b)   additional voting rights on a member of the society or insurer by
virtue of being a holder of a deferred share where the member is a
member other than by virtue of being such a holder.

(2)     Regulations under section 1(1) must make provision prohibiting the holder
of a deferred share who is a member of a friendly society or mutual insurer
by virtue only of being such a holder from proposing or voting in respect
of any of the following—

(a)   a resolution under section 85, 86 or 91 of the Friendly Societies Act
1992 (amalgamation, transfer of engagements or conversions);

(b)   a resolution to similar effect in the case of a mutual insurer,
including a compromise or arrangement proposed at a meeting
called under section 896 of the Companies Act 2006 (court order for
holding meeting);

(c)   an arrangement made in pursuance of section 110 of the Insolvency
Act 1986 (acceptance of shares etc as consideration for sale of
company property) or Article 96 of the Insolvency (Northern
Ireland) Order 1989 (S.I. 1989 / 2405 (N.I. 19));

(d)   such other matters as the regulations may specify.

(3)     References in this section to the holder of a deferred share are to the holder
of a deferred share issued by virtue of regulations made under section
1(1).”

Page 4, line 2, after “a” insert “friendly”

Page 4, line 5, after “a” insert “friendly”

Page 4, leave out lines 8 to 26 and insert—

““the Companies Acts” has the same meaning as in the Companies Act
2006;

“friendly society” means a friendly society registered and
incorporated under the Friendly Societies Act 1992;

“modify” includes amend, repeal or revoke;

“mutual insurer” means a body corporate that—

(a)   is a mutual undertaking that—

(a)   is neither a friendly society nor a registered society
within the meaning of the Co-operative and
Community Benefit Societies Act 2014, and

(b)   is of such description as the Treasury may specify by
regulations,

(b)   has no share capital, and

(c)   has permission to effect or carry out contracts of insurance
under Part 4A of the Financial Services and Markets Act
2000;

“primary legislation” means—

(a)   an Act of Parliament,

(b)   an Act of the Scottish Parliament,

(c)   an Act or Measure of the National Assembly for Wales, or

(d)   Northern Ireland legislation.”

Page 4, line 26, at end insert—

“(2)     The power to make regulations conferred by paragraph (a)(ii) of the
definition of “mutual insurer” is exercisable by statutory instrument.

(3)     A statutory instrument containing them is subject to annulment in
pursuance of a resolution of either House of Parliament.”

Page 4, line 28, leave out “Redeemable and”

Page 4, line 30, leave out “Secretary of State” and insert “Treasury”

Page 4, line 31, leave out “order” and insert “regulations”

Line 1, after “registered” insert “and incorporated”

Line 1, leave out “the Industrial and Provident Societies Act 1965 or”

Line 3, leave out first “and” and insert “or”

Line 3, leave out from “the” to “; and” in line 5 and insert “issue of deferred shares”

Line 6, leave out “certain”