Mutual Capital Instruments

The BCCM is committed to working closely with Government and businesses across the mutual sector to develop new legislation that improves the business environment for federally registered co-operatives and mutuals.

In April 2019, Federal Parliament passed legislation providing for Mutual Capital Instruments (MCIs) as a new bespoke capital instrument for mutual entities.

MCIs are a new type of share that can only be issued by mutual entities, that enable the raising of investment capital, while protecting the mutual ownership structure.

Developed through the Treasury Laws (Mutual Reforms) Act 2019, MCIs function to make the Australian Corporations Act operate fairly for mutually owned businesses, allowing mutuals to compete on an equal footing with other firm types.

The law introduced into the Corporations Act a legal definition for mutual entities, identifying a mutual as a company where each member has no more than one vote. The introduction of this measure demonstrates the importance of our sector to a diverse economy and adds safeguards to mutual ownership by ensuring the centrality of member control.

The legislation is a major step forward for the Australian economy, delivering the first positive change to the Corporations Act for mutuals in 18 years. Conceived by the BCCM, this legislation enables existing mutuals to grow and innovate in sectors as diverse as banking, agriculture and motoring.

In November 2020, the BCCM member Australian Unity became Australia’s first mutual to issue MCIs.

MCI information

About MCIs

Mutual sector businesses, across all industry sectors, that are registered under the Federal Corporations Act are impacted by this Mutual Reforms Act 2019. This Legislation does four things:

  1. Introduces a definition of a mutual entity into the Corporations Act.
  2. Removes uncertainty for institutions in respect of the demutualisation provisions in Part 5 of Schedule 4 of the Corporations Act by replacing RG147.
  3. Provides for Mutual Capital Instruments as a new bespoke capital instrument for mutual entities.
  4. Provides a standard process to allow eligible mutual entities to amend their constitutions to enable them to take advantage of these reforms via a 36-month window.
History of MCI Enabling Legislation

The BCCM began work in 2013 to help to prepare the ground for reforms in favour of cooperatives and mutuals in Australia, and the strategy commenced with the publication of a ‘policy blueprint’, it was swiftly followed by the establishment of a formal Senate Inquiry into Co-operatives and Mutuals.

The BCCM worked with global mutual policy experts, Mutuo, to find the most appropriate way to make changes in Australia and worked with its member businesses to identify sensible amendments to the Corporations Act to help improve the business environment for mutually owned firms.

This work received the support of the bipartisan Senate Economics References Committee in 2016.

It also received Government support via the Hon Scott Morrison MP as Treasurer and the Hon Michael Sukkar MP as Assistant Treasurer subsequently ordered a review of the recommendations from the Senate Committee, to be conducted by Greg Hammond OAM.

The Federal Treasurer accepted all of the recommendations of the Hammond Review.

The BCCM worked hard to build a true bi-partisan consensus in favour of the reforms. The changes were championed both by members of the Liberal-National Coalition and the opposition Labor Party.

The BCCM led the project to work with Treasury to develop the draft legislation that implemented these changes and resulted in the Treasury Laws Amendment (Mutual Reforms) Act 2019, which received Royal Assent on 5 April 2019.

In November 2020, the BCCM member Australian Unity became Australia’s first mutual to issue MCIs.

Advice on Mutual Capital Instruments

The BCCM is committed to ensuring senior executives and boards of mutual entities have access to all the information they need to fully understand what MCIs mean for their business.

The Capital Partners project is a forum for capital market experts and co-operatives and mutuals that are considering issuing MCIs, to exchange knowledge and experience.

Private online events bring co-operatives and mutuals together with leading Australian and International capital market experts to help Capital Partners consider how best to raise capital and grow their business.

Private consultancy

The BCCM and Mutuo have partnered to provide private consultancy to individual mutuals. We can help firms understand the implications of the new legislation and what it means for their strategic planning. This includes:

  • Confidential board briefings;
  • Senior executive briefings;
  • Strategic planning implementation; and
  • Member communication consulting.

About Mutuo

Mutuo is the leading global consultancy for mutuals, promoting all types of co-operative and mutual business through:

  • Public affairs and political advocacy
  • Policy development
  • Management consultancy for mutuals

For more information or a referral, please contact the BCCM.

MCIs in the news

11 April 2022

Mutual Capital Instruments three years on

This week marks the third anniversary of the passing of landmark legislation to enable mutual capital instruments (MCIs) for federally registered co-operative and mutual businesses.
12 January 2021

Australian Unity issues Australian-first MCI

Australian Unity Limited issued $120 million worth of mutual capital instruments (MCIs), at a face value of $100 per security.
5 January 2021

Investment paves way to a more co-operative future

“The investor response to the Australian Unity Offer has shown that there is a healthy appetite for investments that make an impact in our communities."
30 November 2020

Mutual Capital Instruments: The future of co-operatives and mutuals arrives

Australian Unity Limited announced an offer of Australian Unity Mutual Capital Instruments to raise $100 million
20 November 2019

RACQ prepares ground for new financial instruments

AGMs approve constitutional changes to facilitate growth investment without compromising mutual ownership.
14 November 2019

CUA prepare ground to issue new financial instrument in Australia

AGMs approve constitutional changes to facilitate growth investment without compromising mutual ownership. CUA joins three other mutuals that made these changes last week.
31 October 2019

Heritage Bank to target growth in business banking

Heritage Bank aims to triple the size of its business banking portfolio over the next three years, as part of a strategy to diversify both product and geographic weightings, Chairman.
Australian cash
31 October 2019

AMB members vote for growth

Members approve constitutional changes which will facilitate investment without compromising mutual ownership.
31 October 2019

Australian Unity paves the way for new investment instrument

AGM approves constitutional changes to facilitate investment without compromising mutual ownership.
Greg Hammond
25 September 2019

Raising capital in mutuals

Greg Hammond OAM delivered the keynote address at the Australian Friendly Societies Pharmacies Association Conference on 5 September 2019.
melina morrison MCLS
26 June 2019

Mutuals buoyant but need ‘elevator pitch’

Members of mutuals and co-ops need to hone their "elevator pitch" if the concept is to harness the momentum created by the passing of key federal legislation this year, a Sydney audience has been...
Peter Hunt, Mutuo
26 June 2019

Co-op and mutuals introduce new financial instruments for investors

The BCCM held a symposium to explain how the newly available Capital Raising for co-ops and mutuals will work. Earlier this year, landmark legislation was passed to allow co-ops and mutuals the...