Mutuals' Bill gains Royal Assent

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The Mutuals' Deferred Shares Bill has passed into law with the granting of Royal assent to the bill.

The act allows mutuals to raise capital as deferred shares, which will confer membership on their holders, with one vote per member.

The FCA will introduce rules in October 2015 on the retail distribution of a range of regulatory capital instruments including deferred shares, potentially allowing them to be marketed to retail investors.

Mark Austen, chairman of LV=, said: "We very much welcome the passing of this Act and the now widespread support that this demonstrates for mutuals and friendly societies.

"We hope this marks a turning point in the legislative and regulatory attitude towards these ownership models to ensure their further development as an important and diverse part of the financial services industry.

Austen added: "Additionally, as deferred shares will confer membership, it will allow us to develop a new class of members who actively wish to invest in LV='s strategy.

"We hope the new permanent FCA rules on retail distribution of regulatory capital instruments, which will come into effect in October 2015, will follow a sensible and pragmatic approach to allow us to offer shares to retail investors."

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