Select Committee on Delegated Powers and Regulatory Reform Eighteenth Report

ANNEX [to HM Treasury's Memorandum]

Non-exhaustive list of issues the Treasury regard as needing detailed work and consultation before an asset 'lock-in' regime can be introduced under Clause 1 of the Bill.

the degree of flexibility for consolidation and mergers which is needed within the sector; it is important the regulations allow societies with the 'lock-in' to continue to evolve and change their purposes and activities appropriately;

the need, referred to by the Strategy Unit in its report (Private Action, Public Benefit), for "robust mechanisms" to ensure takeovers, mergers and dissolutions of societies are fair and transparent;

defining which societies should be able to adopt an asset 'lock-in'. The community benefit society sector is extremely diverse, ranging from drinking clubs to housing associations. Therefore it might not be appropriate to extend the option of 'locking-in' assets to all societies or it may be necessary to specify more narrowly the purposes for which assets may be 'locked-in';

procedures by which a society could adopt a 'lock-in' on its assets. The procedure to adopt an asset 'lock-in' needs to reflect the importance of the decision and ensure that there is an appropriate level of member participation and protection of the interests of those members who do not wish there to be a 'lock-in';

whether there are any circumstances under which a 'lock-in' could be reversed - for example, following dissolution of a society, where the approval of some overseeing body might be obtained to transfer the assets to a new body with different purposes;

whether some circumstances or issues should be left for a body with supervisory functions to handle on a case-by-case basis or by rules, rather than being dealt with in the secondary legislation itself.

April 2003

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