The Business Council of Co-operatives and Mutuals has today warmly welcomed the publication of draft legislation that will begin the process of modernising the Federal law for mutual businesses.
There are two elements to this draft legislation:
- For the first time, the Corporations Act will correct a longstanding omission, by defining a mutual company, which is the key to opening up a range of new opportunities for mutuals.
- Following on from this, the draft legislation also reforms the often mis-applied demutualisation enhanced disclosure provisions that affect mutual banks and friendly societies – Part 5 of Schedule 4 of the Corporations Act. Once passed, this reform will lead to the withdrawal of ASIC’s Regulatory Guidance note (RG147)
BCCM CEO, Melina Morrison said, ’New legislation is needed to make the Australian Corporations Act work better for mutually owned businesses, so that they can compete on a level playing field with other types of firms.
Over the last nine months, BCCM has worked with its member businesses to try to positively influence how the Government implements the recommendations of the Hammond Review.
Today we are delighted to see the first of two pieces of draft legislation that will help to deliver on the Government’s promise to our sector.
We are looking forward to seeing the second part of this work with Treasury, to create a new capital instrument that may be issued by mutuals, enabling them to grow and better serve Australians, whilst protecting their co-operative ownership structures.’
ReadAssistant Minister Seselja’s media release.
Read the report of the Senate inquiry into co-ops, mutuals and member-owned firms that first recommended these reforms.