Regulation
IPSs are regulated by the Financial Services Authority (FSA), which took the job over from the Registrar of Friendly Societies (both being supervised by the Treasury). Note that IPS registration is quite separate from the FSA's function of regulating financial institutions.
Such businesses have been controlled in the past by the Industrial and Provident Societies Partnership Act 1852 and the Industrial and Provident Societies Act 1893. The legislation in the Republic of Ireland is based on modifications of the UK Industrial and Provident Societies Act 1893.
Nowadays in the UK they fall under Co-operative and Community Benefit Societies and Credit Unions Act 1965 (as it will be renamed by section 2 of the Co-operative and Community Benefit Societies and Credit Unions Act 2010 which is not yet in force; currently the Industrial and Provident Societies Act 1965) and subsequent legislation to the present day such as The Friendly and Industrial and Provident Societies Act 1968 (Audit Exemption) (Amendment) Order 2006 - Statutory Instrument 2006 No. 265 (which increased the audit exemption threshold level for industrial and provident societies to £5.6m)and the Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 - Statutory Instrument 2011 No. 2687 which increased the maximum shareholding limit, changed the date of submission of the annual return, permitted children to be members, and allows the publication of unaudited interim accounts.
On January 19, 2012, British Prime Minister David Cameron announced the Conservative led Government's intention to introduce a consolidating Act for societies to be passed by 2015. This has been argued to provide some limited scope for change and reform but does not deal with certain key problems. Further changes to the registration system are likely to follow the passage of the Financial Services Bill which splits the Financial Services Authority into the Financial Conduct Authority and the Prudential Regulation Authority. This is likely to be passed by the UK Parliament by late 2012 but will not take full effect for some time although the FSA began preparations for the change in April 2012
Some industrial and provident societies that exist for community benefit are charitable. Under British law, they are exempt charities and do not need to register with the regulator for charities (in England and Wales, the Charity Commission). However, when the Charities Act 2006 comes into effect, that exemption is removed from all charitable IPSs in England and Wales. From that point, charitable IPSs have to register with both the FSA and the Charity Commission, except Registered Social Landlords, who register with the Tenant Services Authority.
Read more about this topic: Industrial And Provident Society
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