Friendly Societies Act 1992

• (b) in the case of an appeal against the imposition of conditions or as to the conditions imposed by the decision, to determine conditions or different conditions subject to which the authorisation is to be granted or is to continue, as the case may be;

• (c) in the case of an appeal against a decision to withdraw authorisation, to determine conditions or different conditions subject to which the authorisation is to continue in force, as the case may be;

• (d) in the case of an appeal against a decision as to the steps specified in a direction under section 54 or 55 above, to determine, having taken account of any guidance given under subsection (5) above, the steps which are to be so specified.

• (8) Where by virtue of subsection (7)(d) above the tribunal directs the Commission to determine the steps to be specified in the direction, the society may appeal against the steps so specified.

• (9) Where by virtue of subsection (7) above the tribunal directs the Commission to determine conditions or different conditions—

• (a) the Commission shall in accordance with section 34 or 36 above impose such conditions as it thinks fit; and

• (a) paragraphs 7 and 8 of Schedule 13 to this Act shall apply subject to the modifications made by paragraph 9 of that Schedule;

and the society may appeal to the tribunal against any condition so imposed.

• (10) On any such appeal the tribunal may confirm or reverse the Commission’s decision with respect to the conditions which are the subject of the appeal or may direct the Commission to determine different conditions; and where by virtue of this subsection the tribunal directs the Commission to determine different conditions, subsection (9) above shall apply as it applies where the tribunal gives such a direction by virtue of subsection (7) above.

• (11) Where the tribunal reverses a decision of the Commission to refuse to grant authorisation, it shall direct the Commission to grant it; and where the tribunal reverses a decision of the Commission to make the grant of authorisation subject to conditions, it shall direct the Commission to grant it unconditionally.

• (12) Notice of a tribunal’s determination, together with a statement of its reasons, shall be given to the appellant and to the Commission; and unless the tribunal has directed the Commission to determine conditions or, in any other case, the tribunal directs otherwise, the determination shall come into operation when the notice is given to the appellant.

• (13) The Treasury may out of money provided by Parliament pay to the persons appointed as members of a tribunal under this section such fees and allowances in respect of expenses as the Treasury may determine and any other expenses incurred for the purposes of this section.

Costs, procedure and evidence

60

• (1) A tribunal may give such directions as it thinks fit for the payment of costs or expenses by any party to an appeal.

• (2) On an appeal under section 58(2) above the friendly society in relation to which the determination was made, or upon which the requirement was imposed, shall be entitled to be heard.

• (3) The Treasury may make regulations with respect to appeals under section 58 above; and those regulations may in particular make provision—

• (a) as to the period within which and the manner in which such appeals are to be brought;

• (b) as to the manner in which such appeals are to be conducted, including provision for any hearing to be held in private;

• (c) for requiring any person, on tender of the necessary expenses of his attendance, to attend and give evidence or produce documents in his custody or under his control and for authorising the administration of oaths to witnesses;

• (d) for granting to any person such discovery or inspection of documents or right to further particulars as might be granted by a county court in England and Wales or Northern Ireland or, in Scotland, for granting to any person such recovery or inspection of documents as might be granted by the sheriff;

• (e) for enabling an appellant to withdraw an appeal or the Commission to withdraw its opposition to an appeal and for the consequences of any such withdrawal;

• (f) for taxing or otherwise settling any costs or expenses directed to be paid by the tribunal and for the enforcement of any such direction;

• (g) for enabling any functions in relation to an appeal to be discharged by the chairman of the tribunal; and

• (h) as to any other matter connected with such appeals.

• (4) Regulations under this section with respect to appeals where the friendly society concerned has its registered office in Scotland shall be made by the Lord Advocate.

• (5) A person who, having been required in accordance with regulations under this section to attend and give evidence, fails without reasonable excuse to attend or give evidence shall be liable on summary conviction to a fine not exceeding level 5 on the standard scale.

• (6) A person who intentionally alters, suppresses, conceals, destroys or refuses to produce any document which he has been required to produce in accordance with regulations under this section, or which he is liable to be so required to produce, shall be liable—

• (a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or both;

• (b) on summary conviction, to a fine not exceeding the statutory maximum.

Further appeals on points of law

61

• (1) An appeal shall lie to the High Court at the instance of the friendly society or other person concerned or of the Commission on any question of law arising from any decision of a tribunal under section 59 above; and if the court is of the opinion that the decision was erroneous in law, it shall remit the matter to the tribunal for re-hearing and determination by it.

• (2) In the application of this section to a friendly society whose registered office is in Scotland or Northern Ireland, references to the High Court shall be construed as references to the Court of Session or, as the case may be, the High Court in Northern Ireland.

• (3) No appeal to the Court of Appeal or to the Court of Appeal in Northern Ireland shall be brought from a decision under subsection (1) above except with the leave of that court or of the court or judge from whose decision the appeal is brought.

• (4) An appeal shall lie, with the leave of the Court of Session or the House of Lords, from any decision of the Court of Session under this section, and such leave may be given on such terms as to costs, expenses or otherwise as the Court of Session or the House of Lords may determine.

Information

Powers to obtain information and documents etc

62

• (1) This section applies to information, documents or other material, or explanations of matters which relate to—

• (a) the activities or the plans for future development of a friendly society; or

• (b) the activities or the plans for future development of a subsidiary of or body jointly controlled by an incorporated friendly society;

and, in relation to the imposition of requirements under this section, “the purposes of its supervisory functions” means the purposes of the discharge by the FCA or the PRA of any of its functions under this Act.

• (2) This section does not authorise any requirement in relation to information, documents or other material to be imposed on a subsidiary of or body jointly controlled by an incorporated friendly society unless that subsidiary or body carries on business in the United Kingdom; but a requirement may be imposed under this section on a friendly society in relation to information, documents or other material in the possession or control of a subsidiary of or body jointly controlled by the society which does not carry on business in the United Kingdom.

• (3) Subject to subsection (2) above, the FCA or the PRA may by notice to a friendly society or to a subsidiary of, or body jointly controlled by, an incorporated friendly society, require the body to which it is addressed—

• (a) to furnish to it, within a specified period or at a specified time or times, such specified information as the FCA or the PRA considers it needs for the purposes of its supervisory functions;

• (b) to produce to it, at a specified time and place, such specified documents or other material as the FCA or the PRA considers it needs for the purposes of its supervisory functions;

• (c) to provide to it, within a specified period, such explanations of specified matters as the FCA or the PRA considers it needs for the purposes of its supervisory functions;

• (3A) Subject to subsection (2) above, any person authorised for the purpose by the FCA or the PRA (“an authorised officer") may, on producing evidence of his authority, require a friendly society or a subsidiary of, or body jointly controlled by, an incorporated friendly society—

• (a) to furnish to him forthwith such specified information as the FCA or the PRA considers it needs for the purposes of its supervisory functions;

• (b) to produce to him forthwith such documents or other material as the FCA or the PRA considers it needs for those purposes;

• (c) to provide to him forthwith such explanations of specified matters as the FCA or the PRA considers it needs for those purposes.

• (4) Where by virtue of subsection (3)(a), (b) or (c) above the FCA or the PRA has power, or by virtue of subsection (3A) above an authorised officer has power, to require the furnishing of any information, the production of any document or material or the provision of any explanation by a friendly society, the FCA, the PRA or authorised officer shall have the like power as regards any person who—

• (a) is or has been an officer, employee or agent of the society or, in the case of a society to which section 37(2) or (3) above applies, a controller or manager of the society, or

• (b) in the case of documents or material, appears to the FCA, the PRA or authorised officer to have the document or material in his possession or under his control.

• (5) Where by virtue of subsection (3)(a), (b) or (c) above the FCA or the PRA has power, or by virtue of subsection (3A) above an authorised officer has power, to require the furnishing of any information, the production of any document or material or the provision of any explanation by a subsidiary of or body jointly controlled by an incorporated friendly society, the FCA, the PRA or authorised officer shall have the like power as regards any person who—

• (a) is or has been an officer, employee or agent of the subsidiary or jointly controlled body, or

• (b) in the case of documents or material, appears to the FCA, the PRA or authorised officer to have the document or material in his possession or under his control.

• (5A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (6) Where any person from whom production of a document or material is required under subsection (4) or (5) above claims a lien on the document or material, the production of it shall be without prejudice to the lien.

• (7) Nothing in the foregoing provisions of this section shall compel the production—

• (a) by a relevant lawyer of a document or material contained in a privileged communication or, in Scotland, a communication which is protected from disclosure on the ground of confidentiality, made by or to the relevant lawyer in that capacity or the furnishing of information contained in such communication so made;

• (c) by an independent qualified conveyancer, an executry practitioner or a recognised financial institution of a document or material contained in a communication made by him or to him which is protected from disclosure by virtue of section 22 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990 or the furnishing of information contained in such a communication.

• (8) Where, by virtue of subsection (3), (3A), (4) or (5) above, the FCA, the PRA or an authorised officer requires the production by a friendly society or other body or any other person of documents or material, the FCA, the PRA or authorised officer may—

• (a) if the documents or material are not produced, require that person to state, to the best of his knowledge and belief, where the documents or material are;

• (b) if the documents or material are produced, take copies of or extracts from them and require that person or any other person who is or has been an officer, employee or agent of the friendly society or other body, as the case may be, to provide an explanation of the documents or material.

• (9) Any person who, when required to do so under this section, fails without reasonable excuse to furnish any information or report, to produce any documents or material, or to provide any explanation or make any statement, shall be guilty of an offence and liable on summary conviction—

• (a) to a fine not exceeding level 5 on the standard scale; and

• (b) in the case of a continuing offence, to an additional fine not exceeding one tenth of that level one-tenth of the greater of £5,000 or level 4 on the standard scale for every day during which the offence continues.

• (10) Any friendly society which furnishes any information, provides any explanation or makes any statement which is false or misleading in a material particular, shall be guilty of an offence and liable—

• (a) on conviction on indictment, to a fine; and

• (b) on summary conviction to a fine not exceeding the statutory maximum.

• (11) Any person who knowingly or recklessly furnishes any information, provides any explanation or makes any statement which is false or misleading in a material particular shall be guilty of an offence and liable—

• (a) on conviction on indictment, to imprisonment for a term not exceeding 2 years or to a fine or both; and

• (b) on summary conviction, to a fine not exceeding the statutory maximum.

• (12) In this section—

• “specified” means specified in a notice under this section; and

• “agent”, in relation to a friendly society or a subsidiary of, or body jointly controlled by, an incorporated friendly society, includes its bankers, accountants, solicitors and auditors and the appropriate actuary ; and

• “relevant lawyer” means a barrister, advocate, solicitor or other legal representative communications with whom may be the subject of a claim to professional privilege or, in Scotland, be protected from disclosure in legal proceedings on grounds of confidentiality of communication.

Confidentiality of certain information

63

• (1) Subject to section 64 below, no restricted information which relates to the business or other affairs of a friendly society, a registered branch of a friendly society or any other person shall be disclosed (otherwise than to an officer or employee of the primary recipient) by—

• (a) the primary recipient; or

• (b) any person obtaining the information directly or indirectly from him,

without the consent of the person from whom the primary recipient obtained the information and, if different, the person to whom it relates.

• (2) For the purposes of this section—

• “the primary recipient” means the Commission, the Chief Registrar, the central office or any officer or servant of any such person; and

• “restricted information” means information which is obtained by the primary recipient for the purposes of, or in the discharge of his functions under, this Act or the 1974 Act;

but information shall not be treated as restricted information if it has been made available to the public by virtue of being disclosed in any circumstances in which, or for any purpose for which, disclosure is not precluded by this section.

• (3) Any information disclosed to the Commission or the Chief Registrar by an overseas regulatory authority (within the meaning of section 64 below) shall be treated as restricted information for the purposes of this section.

• (4) A person who discloses information in contravention of this section shall be guilty of an offence and liable—

• (a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or both; and

• (b) on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding the statutory maximum, or both.

Exceptions from restrictions on disclosure

64

• (1) Information which is restricted information for the purposes of section 63 above may be disclosed—

• (a) to any person with a view to the institution of, or otherwise for the purposes of, relevant proceedings;

• (b) if it is information which is or has been available to the public from other sources;

• (c) in the form of a summary or collection of information so framed as not to enable information related to any particular body or person to be ascertained from it;

• (d) to the extent that it is information which is provided for the purpose, under any provision of this Act or the 1974 Act, of its being made available to the public in any manner;

• (e) in pursuance of any Community obligation;

• (f) for the purpose of facilitating the discharge by the Commission, the Chief Registrar or the central office of any of their functions under this Act or the 1974 Act;

• (g) to the Treasury, if the disclosure is made for the purpose of facilitating the discharge of any functions of the Treasury under this Act or the 1974 Act or otherwise in the interests of members of friendly societies or in the public interest;

• (h) for the purpose of enabling or assisting any person appointed investigator under section 65 below or inspector under section 66 below to discharge his duties under that section; or

• (i) for the purpose of facilitating the discharge by the auditors of a friendly society of their duties to the Commission.

• (2) For the purposes of subsection (1)(a) above “relevant proceedings” are—

• (a) any criminal proceedings;

• (b) any civil proceedings by or at the relation of or against the Commission or the Chief Registrar arising out of the discharge of any of their functions under this Act or the 1974 Act;

• (c) any disciplinary proceedings relating to—

• (i) the exercise by a solicitor, auditor, accountant, actuary or valuer of his professional duties;

• (ii) the discharge by a public servant of his duties;

and in paragraph (c) above “public servant” means an officer or servant of the Crown (including an officer or servant of the Crown in right of Her Majesty’s Government in Northern Ireland) or of any public or other authority designated for the purpose by order made by the Treasury.

• (3) Nothing in section 63 above prohibits the disclosure of information to the Secretary of State or the Department of Economic Development in Northern Ireland in circumstances where it is desirable or expedient—

• (a) that the information should be disclosed in the interests of members of a friendly society or in the public interest; or

• (b) it is desirable or expedient that the information should be disclosed for the purpose of facilitating the discharge—

• (i) by the Secretary of State, of any functions of his under the enactments relating to companies, insurance companies, or insolvency or under the Financial Services Act 1986 or any provision of Parts II, III or VII of the Companies Act 1989; or

• (ii) by the Department, of any of its functions relating to companies or insolvency, or under Part III of the Companies (Northern Ireland) Order 1990 or Part II or V of the Companies (No. 2) (Northern Ireland) Order 1990;

nor does that section prohibit further disclosure of the information by the Secretary of State or the Department with the consent of the Commission.

• (3A) Nothing in section 63 above prohibits the disclosure of information to the Treasury in circumstances where it is desirable or expedient that the information should be disclosed for the purpose of facilitating the discharge by the Treasury of any functions of theirs under the enactments relating to insurance companies, under the Financial Services Act 1986 or under Part III or Part VII of the Companies Act 1989 nor does that section prohibit further disclosure of the information by the Treasury with the consent of the Commission.

• (4) Nothing in section 63 above prohibits the disclosure of information to an authority mentioned in subsection (5) below (a “relevant authority") in circumstances where, in the opinion of the Commission, it is desirable or expedient that the information should be disclosed—

• (a) in the interests of members of a friendly society or in the public interest; or

• (b) with a view to facilitating the discharge by the authority, of any functions of the authority (including functions in relation to proceedings) mentioned in that subsection (“relevant functions”);

nor does that section prohibit further disclosure of the information, with the consent of the Commission.

• (5) The relevant authorities mentioned in subsection (4) above and the relevant functions in relation to each such authority, are as follows—

Authority	Functions
1. An inspector appointed under Part XIV of the Companies Act 1985, Part XV of the Companies (Northern Ireland) Order 1986 or section 94 or 177 of the Financial Services Act 1986.	Functions under that Part or that section or Article.
2. A person authorised to exercise powers under section 44 of the Insurance Companies Act 1982, section 447 of the Companies Act 1985, section 106 of the Financial Services Act 1986 or section 84 of the Companies Act 1989 or Article 440 of the Companies (Northern Ireland) Order 1986.	Functions under that section or Article.
3.The Policyholders Protection Board.	Functions under the Policyholders Protection Act 1975.
4.A designated agency within the meaning of the Financial Services Act 1986.	Functions under that Act or Part VII of the Companies Act 1989.
5.A transferee body or the competent authority within the meaning of the Financial Services Act 1986.	Functions under that Act.
6.A body administering a scheme under section 54 of the Financial Services Act 1986.	Functions under the scheme.
7.A recognised self-regulating organisation, recognised professional body, recognised investment exchange, recognised clearing house, or recognised self-regulating organisation for friendly societies (within the meaning of the Financial Services Act 1986).	Functions in its capacity as an organisation, body, exchange or clearing house recognised under that Act.
8.The Bank of England.	Any of its functions
The Financial Services Authority.	Functions under the Financial Services Act 1986 (other than as a designated agency within the meaning of that Act), the Banking Act 1987 or section 171 of the Companies Act 1989.
9. A body established by order under section 46 of the Companies Act 1989.	Functions under Part II of that Act.
10. A recognised supervisory or qualifying body (within the meaning of Part II of the Companies Act 1989 or Part III of the Companies (Northern Ireland) Order 1990). .	Functions as such a body or functions in relation to disciplinary proceedings against auditors.
11.The Industrial Assurance Commissioner for Northern Ireland.	Functions under the enactments relating to industrial assurance.
. . ..	. . ..
13.The Official Receiver or the Official Receiver for Northern Ireland.	Functions under the enactments relating to insolvency.
14A recognised professional body (within the meaning of section 391 of the Insolvency Act 1986 or Article 350 of the Insolvency (Northern Ireland) Order 1989).	Functions in its capacity as such a body under that Act or that Order or functions in relation to disciplinary proceedings against insolvency practitioners (within the meaning of that Act or that Order).
15.The Building Societies Commission.	Functions under the Building Societies Act 1986.
The Occupational Pensions Regulatory Authority.	Functions under the Pension Schemes Act 1993 or the Pensions Act 1995 or any enactment in force in Northern Ireland corresponding to either of them.
16.The Director-General of Fair Trading.	Functions under the Financial Services Act 1986.
17An actuary exercising functions under this Act.	Those functions.
18The Institute of Actuaries or the Faculty of Actuaries.	Supervisory functions in relation to actuaries exercising functions under this Act.

• (6) The Commission, with the consent of the Treasury, may by order—

• (a) amend the Table in subsection (5) above so as to—

• (i) add any public or other authority to the Table and specify the relevant functions of that authority;

• (ii) remove any authority from the Table; or

• (iii) add functions to, or remove functions from, those which are relevant functions in relation to an authority specified in the Table;

• (b) restrict the circumstances in which information may, by virtue of subsection (4) above, be disclosed or further disclosed; and

• (c) impose conditions subject to which the information may be disclosed or further disclosed.

• (7) Nothing in section 63 above prohibits the disclosure to an overseas regulatory authority of information for the purpose of assisting that authority in the discharge of its functions.

• (7A) In the case of restricted information which relates to the business or other affairs of a friendly society to which section 37(2) or (3) above applies, no disclosure may be made by virtue of subsection (1), (3), (4) or (7) above unless the disclosure appears to be in accordance with–

• (a) Article 16 of the third general insurance Directive; or

• (b) Article 15 of the third life Directive.

• (8) In this section—

• “authority” includes any body (corporate or unincorporate) which is charged with the regulation of the carrying on of any description of financial or insurance business or the practice of any profession to which the carrying on of such business is incidental;

• “overseas regulatory authority” means any government department or public or other authority in a country or territory outside the United Kingdom which is charged under the law of that country or territory with the regulation of companies, insurance companies, financial services, banking or any business corresponding to the business which may be carried on by friendly societies (or their subsidiaries); and

• “regulation”, in relation to any public or other authority, means regulation in the public interest or for the protection of private interests.

Inspections etc.

Investigations on behalf of Commission

65

• (1) If it appears to the FCA or the PRA desirable to do so for the purpose of its supervisory functions in relation to a friendly society, the FCA or the PRA may appoint one or more competent persons to investigate and report to it on the state and conduct of the activities of the society, or any particular aspect of those activities.

• (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) If a person appointed under subsection (1) . . . above thinks it necessary for the purposes of his investigation, he may also investigate the activities of any body corporate which is or has at any relevant time been a subsidiary of, or jointly controlled by, the society under investigation.

• (3) It shall be the duty of every person who is or has been an officer, employee and agent of a friendly society or other body which is under investigation—

• (a) to produce to the persons appointed under subsection (1) . . . above all records, books and papers relating to the body concerned which are in his custody or power; and

• (b) to attend before those persons when required to do so;

• (c) to answer any question which is put to him by those persons with respect to any friendly society or other body which is under investigation,

and otherwise to give to those persons all assistance in connection with the investigation which he is reasonably able to give.

• (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) A person who, without reasonable excuse—

• (a) fails to produce any records, books or papers which it is his duty to produce under subsection (3)(a) above; or

• (b) fails to comply with his duty under subsection (3)(b) or (c) above;

shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.

• (5) A person who is or has been an officer, employee or agent of a friendly society or other body and who knowingly or recklessly furnishes to any person appointed under subsection (1) . . . above any information which is false or misleading in a material particular, shall be guilty of an offence and liable—

• (a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or both; and

• (b) on summary conviction, to a fine not exceeding the statutory maximum.

• (5A) In relation to a friendly society to which section 37(2) or (3) above applies, any reference in subsection (3) or (5) above to a person who is or has been an officer shall be read as including a reference to a person who is or has been a controller or manager.

• (6) In this section—

• “agent”, in relation to a friendly society or other body whose activities are under investigation, includes its bankers, accountants, solicitors and auditors and the appropriate actuary;

• “the purposes of its supervisory functions”, in relation to the FCA or the PRA, has the same meaning as in section 62 above.

Inspections and special meetings: general

66

• (1) In the circumstances mentioned in subsection (2) below, the FCA or the PRA may—

• (a) appoint one or more competent inspectors to investigate and report on the affairs of a friendly society; or

• (b) call a special meeting of a friendly society to consider its affairs; or

• (c) appoint (whether on the same or on different occasions) an inspector or inspectors and call a special meeting for those purposes;

and, in the circumstances mentioned in subsection (3) below, the investigation or consideration may extend to the affairs of any body corporate which is or at any relevant time has been a subsidiary of or jointly controlled by the society concerned.

• (2) The powers conferred by subsection (1) above may be exercised either—

• (a) on the application of the requisite number of members of the society concerned; or

• (b) where the is of the opinion that an investigation should be held into the affairs of the society, or that the affairs of the society call for consideration by a meeting of its members;

but paragraph (a) above shall not apply to a registered society with branches (regardless of the number of members) except with the consent of the central body of that society.

• (3) The powers conferred by subsection (1) above may be exercised so as to extend the investigation or consideration to the affairs of a body which is or has been a subsidiary of or jointly controlled by a friendly society either—

• (a) where an application referred to in subsection (2)(a) above so requests; or

• (b) where the FCA or the PRA is of the opinion that it is necessary for the purposes of the investigation into or consideration of the affairs of the friendly society that the affairs of the subsidiary or other body should also be investigated or considered.

• (4) Where the inspectors are of the opinion mentioned in subsection (3)(b) above in relation to a subsidiary of or a body jointly controlled by the society under investigation they may, with the consent of the , extend their investigation to the affairs of the subsidiary or other body and make their report accordingly.

• (5) For the purposes of subsections (1) to (3) above the requisite number of members—

• (a) in the case of a friendly society having more than 1,000 members, is 100; and

• (b) in the case of any other friendly society, is one-tenth of the whole number of members of the society.

• (6) Where an application is made as mentioned in subsection (2) above—

• (a) the application shall be supported by such evidence as the FCA or the PRA may require for the purpose of showing that the applicants have good reason for making the application and are not actuated by malicious, frivolous, vexatious or scandalous motives;

• (b) such notice of the application shall be given to the society concerned and, if the application extends to the affairs of a subsidiary of or body jointly controlled by that society, to that subsidiary or other body, as the FCA or the PRA may direct;

• (c) the FCA or the PRA may require the applicants to give security for payment of the costs of the investigation or meeting before the inspector is appointed or the meeting is called subject, in the case of the costs of an investigation, to an amount not exceeding the corresponding Companies Act limit; and

• (d) as regards the expenses of or incidental to the investigation or meeting—

• (i) in the case of an investigation (in whichever way instituted), the expenses shall be defrayed in the first instance by the FCA or the PRA but without prejudice to its rights to contribution under section 67(10) below;

• (ii) in the case of a meeting, the expenses shall be defrayed by the applicants, or out of the funds of the society, or by the members or officers or former members or officers of the society, in such proportions as the FCA or the PRA may direct.

• (7) Before exercising its powers under subsection (1) above in a case falling within subsection (2)(b) above, the FCA or the PRA shall inform the society of the action which it proposes to take and the grounds for that action, and the society shall, within 14 days of receiving the information, be entitled to give the FCA or the PRA an explanatory statement in writing by way of a reply.

• (8) Where the FCA or the PRA proposes to exercise its powers under subsection (1) above in a case falling within subsection (3)(b) above, subsection (7) above shall apply in relation to the subsidiary or jointly controlled body as it applies in relation to the society.

• (9) Inspectors appointed under this section shall, in addition to having the powers which are necessary for or incidental to the discharge of their functions under this section, have the power specified in section 67 below.

• (10) Where a special meeting is called under this section—

• (a) the FCA or the PRA may—

• (i) direct at what time and place the meeting is to be held and what matters are to be discussed and determined at the meeting; and

• (ii) direct which members may attend and vote at the meeting,

and may give such other directions as it thinks fit with respect to the call, holding and conduct of the meeting;

• (b) the FCA or the PRA may appoint a person to be chairman at the meeting or, in default of such an appointment, the meeting may appoint its own chairman;

• (c) the meeting shall have all the powers of a meeting called according to the rules of the society;

and the provisions of this subsection and any direction given under it shall have effect notwithstanding anything in the rules of the society.

• (11) In this section “the corresponding Companies Act limit”, in relation to security for the payment of the costs of an investigation, is £5,000 or such other sum as is specified for the time being in an order under section 431(4) of the Companies Act 1985 ....

Inspections: supplementary provision

67

• (1) In this section—

• “the body under investigation” means—the friendly society whose affairs are the subject of the investigation, orthe friendly society, and each subsidiary of or body jointly controlled by the society, whose affairs are so subject,as the case may be;

• “the inspectors” means the person appointed by the FCA or the PRA under section 66 above to conduct the investigation;

• “the investigation” means the investigation under section 66 above which the inspectors have been appointed to hold;

and references to officers, employees or agents include past, as well as present, officers, employees or agents; and “agents”, in relation to a friendly society or any subsidiary of or body jointly controlled by an incorporated friendly society, includes its bankers, accountants, solicitors and auditors and the appropriate actuary.

• (2) When the inspectors have been appointed, it is the duty of all officers, employees and agents of the body under investigation—

• (a) to produce to the inspectors all documents and material of or relating to the body under investigation which are in their custody or power;

• (b) to attend before the inspectors when required to do so; and

• (c) otherwise to give the inspectors all assistance in connection with the investigation which they are reasonably able to give.

• (3) If the inspectors consider that a person other than an officer, employee or agent of the body under investigation is or may be in possession of information concerning its affairs, they may require that person to produce to them any documents or material in his custody or power relating to the body under investigation, to attend before them and otherwise to give them all assistance in connection with the investigation which he is reasonably able to give; and it is that person’s duty to comply with the requirement.

• (4) The inspectors may examine on oath the officers, employees and agents of the body under investigation, and any such person as is mentioned in subsection (3) above, in relation to the affairs of the body under investigation, and may administer an oath accordingly.

• (5) An answer given by a person to a question put to him under the foregoing provisions of this section may be used in evidence against him.

• (5A) However, in criminal proceedings in which that person is charged with an offence to which this subsection applies—

• (a) no evidence relating to the statement may be adduced, and

• (b) no question relating to it may be asked,

by or on behalf of the prosecution, unless evidence relating to it is adduced, or a question relating to it is asked, in the proceedings by or on behalf of that person.

• (5B) Subsection (5A) above applies to any offence other than—

• (a) an offence under section 2 or 5 of the Perjury Act 1911 (false statements made on oath otherwise than in judicial proceedings or made otherwise than on oath);

• (b) an offence under section 44(1) or (2) of the Criminal Law (Consolidation) (Scotland) Act 1995 (false statements made on oath or otherwise than on oath); or

• (c) an offence under Article 7 or 10 of the Perjury (Northern Ireland) Order 1979 (false statements made on oath otherwise than in judicial proceedings or made otherwise than on oath).

• (6) If an officer, employee or agent of the body under investigation or any such person as is mentioned in subsection (3) above—

• (a) refuses to produce any document or material which it is his duty under this section to produce; or

• (b) refuses to attend before the inspectors when required to do so; or

• (c) refuses to answer any question put to him by the inspectors with respect to the affairs of the body under investigation,

the inspectors may certify the refusal in writing to the High Court; and the court may thereupon enquire into the case and, after hearing any witnesses who may be produced against or on behalf of the alleged offender and after hearing any statement which may be offered in defence, may punish the offender in like manner as if he had been guilty of contempt of the court.

• (7) The inspectors may, and if so directed by the FCA or the PRA shall, make interim reports to the FCA or the PRA, but they may at any time in the course of the investigation, without making an interim report, inform the FCA or the PRA of matters coming to their knowledge as a result of the investigation tending to show that an offence has been committed.

• (8) The FCA or the PRA may, if it thinks fit—

• (a) send a copy of any report made by the inspectors to the body whose affairs are or were the subject of the investigation;

• (b) furnish a copy of any such report on request . . . to—

• (i) any member of the body whose affairs are or were the subject of the investigation;

• (ii) the auditors of that body;

• (iii) any person whose conduct is referred to in the report;

• (iv) any other person whose financial interests appear to the FCA or the PRA to be affected by matters dealt with in the report, whether as creditor or otherwise; and

• (c) cause the report to be printed and published.

• (8A) The FCA or the PRA may charge a reasonable fee for furnishing to any person a copy of a report under subsection (8)(b) above.

• (9) A copy of a report of inspectors appointed under section 66 above to hold an investigation under that section, certified by the FCA or the PRA to be a true copy, is admissible in any legal proceedings as evidence of the opinion of the inspectors in relation to any matter contained in the report; and a document purporting to be such a certificate shall be received in evidence and be deemed to be such a certificate, unless the contrary is proved.

• (10) The FCA or the PRA shall be entitled to be repaid the expenses of the investigation defrayed by it under section 66(6)(d) above as provided in the following paragraph, that is to say—

• (a) by the applicants for the investigation, to such extent (if any) as the FCA or the PRA may direct;

• (b) by any body whose affairs were the subject of the investigation, to such extent (if any) as the FCA or the PRA may direct;

• (c) by any person convicted of an offence in proceedings instituted as a result of the investigation, to such extent (if any) as the court by or before which he was convicted may order;

and a person liable under any one of paragraphs (a) to (c) above is entitled to contribution from any other person liable under the same paragraph, according to the amount of their respective liabilities under it.

• (10A) In relation to a friendly society to which section 37(2) or (3) above applies–

• (a) any reference in subsection (1), (2) or (4) above to officers shall be read as including a reference to controllers or managers; and

• (b) any reference in subsection (3) or (6) above to an officer shall be read as including a reference to a controller or manager.

• (11) In the application of this section to a friendly society whose registered office is in Scotland or Northern Ireland, any reference to the High Court shall be read as a reference to the Court of Session or, as the case may be, to the High Court in Northern Ireland.

Part VI — Accounts and Audit

Records . . .

Accounting records and systems of business control

68

• (1) Every friendly society and every registered branch shall—

• (a) cause accounting records to be kept; . . .

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

in accordance with this section.

• (2) The accounting records must be sufficient to show and explain the transactions of the society or branch and—

• (a) disclose, with reasonable accuracy and promptness, the financial position of the society or branch at any time;

• (b) enable the committee of management properly to discharge the duties imposed on them by or under this Act or the 1974 Act (and, where applicable, section 403(1) of the Companies Act 2006 (group accounts: applicable accounting framework) and their function of direction of the affairs of the society or branch; and

• (c) enable the society or branch properly to discharge the duties imposed on it by or under this Act or the 1974 Act (and, where applicable, section 403(1) of the Companies Act 2006 (group accounts: applicable accounting framework),

and must be kept in an orderly manner.

• (3) The accounting records shall in particular contain—

• (a) entries from day to day of all sums received and paid by the society or branch and the matters in respect of which they are received or paid;

• (b) entries from day to day of every transaction entered into by the society or branch which will or there is reasonable ground for expecting may give rise to liabilities or assets of the society or branch other than insignificant assets or liabilities in respect of the management of the society or branch; and

• (c) a record of the assets and liabilities of the society or branch.

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (8) The accounting records shall be kept at the registered office of the society or branch or at such other place or places as the committee of management thinks fit, and shall at all times be open to inspection by the committee of management.

• (9) Accounting records shall be preserved for 6 years from the date on which they were made.

• (10) Where an incorporated friendly society has subsidiaries or jointly controls other bodies, the society shall also secure that such accounting records are kept . . . by them as will enable the society to comply with the requirements of this section in relation to the business of the society and those subsidiaries and jointly controlled bodies.

• (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Annual accounts of friendly societies and registered branches

Duty to prepare accounts

69

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Contents and form of annual accounts

70

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Committee of management’s annual report

Report on a friendly society’s affairs by the committee of management

71

• (1) The committee of management of a friendly society shall prepare for submission to the annual general meeting of the society a report on the activities of the society containing—

• (a) a fair review of the business of the society, its subsidiary undertakings and bodies that it jointly controls (if any) complying with section 71A;

• (aa) a description of the principal risks and uncertainties facing the society, its subsidiary undertakings and bodies that it jointly controls (if any);

• (b) such information relating to such aspects of the activities of the society as may be prescribed by regulations made by the . . . Treasury; and

• (c) a statement whether any and, if so, what activities carried on during the year by the society are believed to have been carried on outside its powers.

• (1A) If the friendly society has subsidiary undertakings, the report may, where appropriate, give greater emphasis to those matters which are significant to the society and its subsidiary undertakings taken as a whole.

• (2) Where an incorporated friendly society has subsidiaries or jointly controls other bodies, the report shall-

• (a) contain such information relating to such aspects of the activities of any subsidiaries or bodies which it jointly controls as may be prescribed by regulations made by the . . . Treasury;

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) contain a statement whether any and, if so, what activities carried on during the year by any of its subsidiaries or by any body which it jointly controls are believed to have been carried on outside the powers of the subsidiary or jointly controlled body.

• (3) If a report under this section does not contain the prescribed information or the information in the report is not given in accordance with the regulations, each member of the committee of management shall be guilty of an offence and liable—

• (a) on conviction on indictment, to a fine; and

• (b) on summary conviction, to a fine not exceeding the statutory maximum.

Auditors

Auditors' appointment, tenure, qualifications, etc

72

• (1) Every friendly society and every registered branch shall at each annual general meeting appoint an auditor or auditors to hold office from the conclusion of that meeting until the conclusion of the next annual general meeting.

• (2) Schedule 14 to this Act has effect as regards—

• (a) the appointment of auditors;

• (b) their qualifications and grounds of disqualification;

• (c) the resignation and removal of auditors; and

• (d) the remuneration of auditors.

• (3) Schedule 14A to this Act has effect with regard to the appointment and removal of auditors of societies subject to special requirements.

Auditors’ report on annual accounts

Auditors' report

73

• (1) The auditor of a friendly society or of a registered branch shall make a written report to the members on the annual accounts which are to be laid before the society or branch at the annual general meeting during his tenure of office.

• (2) The auditor of a friendly society or registered branch shall, in preparing his report, carry out such investigations as will enable him to form an opinion as to—

• (a) whether adequate accounting records have been kept under section 68 above;

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) whether the annual accounts are in agreement with the accounting records;

...

• (2A) If the auditor is of the opinion that—

• (a) adequate accounting records have not been kept under section 68, or

• (b) the annual accounts are not in agreement with the accounting records,

the auditor must state that fact in his report.

• (3) If the auditor fails to obtain all the information and explanations and the access to documents which, to the best of his knowledge and belief, are necessary for the purposes of his audit, he shall state that fact in his report.

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4A) The auditor shall, in his report—

• (a) state whether, in his opinion, based on the work undertaken in the course of the audit—

• (i) the information given in the report of the committee of management for the financial year for which the annual accounts are prepared is consistent with those accounts,

• (ii) that report has been prepared in accordance with this Act and the regulations made under it,

• (b) state whether, in the light of the knowledge and understanding of the society or registered branch and its environment obtained in the course of the audit, the auditor has identified material misstatements in the report of the committee of management, and

• (c) if applicable, give an indication of the nature of each of the misstatements referred to in paragraph (b).

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5A) The auditor’s report must include—

• (a) the identity of the friendly society or registered branch whose annual accounts are the subject of the audit,

• (b) a description of the annual accounts that are the subject of the audit (including the period covered by those accounts),

• (c) a description of the financial reporting framework that has been applied in the preparation of those accounts, and

• (d) a description of the scope of the audit identifying the auditing standards in accordance with which the audit was conducted.

• (5B) The report must clearly state the opinion of the auditor as to whether the annual accounts—

• (a) give a true and fair view—

• (i) in the case of an individual balance sheet, of the state of affairs of the society or branch as at the end of the financial year,

• (ii) in the case of an individual income and expenditure account, of the income and expenditure of the society or branch for the financial year, and

• (iii) in the case of the group accounts of an incorporated friendly society, of the state of affairs as at the end of the financial year and of the income and expenditure for the financial year of the society and the subsidiary undertakings dealt with in the group accounts, so far as concerns members of the society,

• (b) have been properly prepared in accordance with the relevant financial reporting framework, and

• (c) have been prepared in accordance with the requirements of this Act (and where applicable, section 403(1) of the Companies Act 2006 (group accounts: applicable accounting framework).

• (5C) The auditor’s report must—

• (a) be either unqualified or qualified,

• (b) include a reference to any matters to which the auditor wishes to draw attention by way of emphasis without qualifying the report,

• (c) include a statement on any material uncertainty relating to events or conditions that may cast significant doubt about the ability of the friendly society or registered branch to continue to adopt the going concern basis of accounting, and

• (d) identify the auditor’s place of establishment.

• (6) Where more than one person is appointed as auditor, all the persons appointed must jointly make a report under this section, which must include a statement as to whether they all agree on—

• (a) the matters contained in the report,

• (b) the statements given under subsections (2A), (3) and (4A), and

• (c) the indications given under subsection (4A).

• (7) Where the persons do not all agree on all of those things, the report must—

• (a) include the opinions of each person appointed, and

• (b) give reasons for the disagreement.

Signature of auditors' report

74

• (1) The auditor’s report to the members of a friendly society or registered branch must state the name of the auditor (or, where more than one person is appointed as auditor, all of their names) and be signed and dated.

• (2) Where the auditor is an individual, the report must be signed by him.

• (3) Where the auditor is a firm, the report must be signed—

• (a) in the case of a friendly society subject to special requirements, by the senior statutory auditor in his own name, for and on behalf of the firm;

• (b) in any other case—

• (i) in the name of the firm by a person authorised to sign on its behalf, or

• (ii) if the firm has identified a senior statutory auditor in relation to the audit, by that person, in his own name, for and on behalf of the firm.

• (4) Where more than one person is appointed as auditor, the report must be signed by all those appointed.

Auditors' rights to information and to attend meetings

75

• (1) The auditor of a friendly society is entitled—

• (a) to access at all times to the books, accounts and vouchers of the society;

• (b) to require from the officers of the society such information and explanations as he thinks necessary for the performance of his duties as auditor;

• (c) to receive from the society—

• (i) notice of any general meeting of the society and of any matter relating to the business of such a meeting of which notice is given (by whatever means) to the society’s members; and

• (ii) copies of any communications sent to the society’s members with respect to any such meeting; and

• (d) to attend any general meeting of the society and to be heard on any part of the business of the meeting which concerns him as auditor;

and the auditor of a registered branch has the corresponding rights to those specified in paragraphs (a) to (d) above, with the substitution for references to the society of references to the branch.

• (2) The right to attend or be heard at a meeting is exercisable in the case of a body corporate or partnership by an individual authorised by it in writing to act as its representative at the meeting.

• (3) An officer of a friendly society is guilty of an offence if he knowingly or recklessly makes to the society’s auditor a statement (whether written or oral) which—

• (a) conveys or purports to convey any information or explanations which the auditor requires, or is entitled to require, as auditor of the society; and

• (b) is misleading, false or deceptive in a material particular.

• (4) An officer of a registered branch is guilty of an offence if he knowingly or recklessly makes to the auditor of the branch a statement (whether written or oral) which—

• (a) conveys or purports to convey any information or explanations which the auditor requires, or is entitled to require, as auditor of the branch; and

• (b) is misleading, false or deceptive in a material particular.

• (5) A person guilty of an offence under subsection (3) or (4) above is liable —

• (a) on conviction on indictment, to imprisonment for a term not exceeding 2 years, or to a fine, or to both; and

• (b) on summary conviction, to imprisonment for a term not exceeding 6 months or to a fine not exceeding the statutory maximum, or to both.

• (6) Where a subsidiary of a friendly society is a company (as defined in section 1(1) of the Companies Act 2006), the subsidiary and its auditors must give to the auditors of the friendly society such information and explanations as they may reasonably require for the purposes of their duties as auditors of the society.

• (7) If—

• (a) a subsidiary to which subsection (6) above applies fails to comply with that subsection; or

• (b) an auditor of such a subsidiary fails without reasonable excuse to comply with that subsection,

the subsidiary or auditor is guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.

• (8) An incorporated friendly society having a subsidiary to which subsection (6) above does not apply shall, if required by its auditor to do so, take all such steps as are reasonably open to it to obtain from the subsidiary such information and explanations as he may reasonably require for the purposes of his duties as auditor of that society.

• (9) If an incorporated friendly society fails to comply with subsection (8) above, it is guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.

Approval and signing of accounts

76

• (1) The annual accounts of a friendly society or a registered branch shall be approved by the committee of management.

• (2) The accounts so approved shall be signed by the secretary of the society or branch; and the signature shall be on the balance sheet.

• (3) Every copy of the balance sheet which is laid before the society or branch in general meeting, or is otherwise circulated, published or issued, shall state the name of the secretary of the society or branch.

• (4) The copy of the balance sheet of a friendly society or a registered branch which is sent ... under section 78 below shall be signed by the secretary of the society or branch.

• (5) If annual accounts of a society or branch are approved which do not comply with the requirements of this Act, every member of the committee of management who is party to their approval and who knows that they do not comply or is reckless as to whether they comply is guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.

For this purpose every member of the committee at the time the accounts are approved shall be taken to be a party to their approval unless he shows that he took all reasonable steps to prevent their being approved.

• (6) If a copy of the balance sheet of a society or branch—

• (a) is laid before the society or branch, or otherwise circulated, published or issued, without the balance sheet having been signed as required by this section or without the required statement of the signatory’s name being included; or

• (b) is sent ... without being signed as required by this section,

the society or branch and every officer of it who is in default is guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale.

Information on appointed actuary to be annexed to balance sheet

77

• (1) This section applies to any copy of a friendly society’s balance sheet which—

• (a) is furnished under section 78 to the FCA and, if the society is a PRA-authorised person, the PRA;

• (aa) is furnished to either the FCA or the PRA at its request;

• (b) is laid before the society at its annual general meeting; or

• (c) is furnished to a member at his request.

• (2) Subject to the provisions of this section, a friendly society shall annex to each copy of its balance sheet to which this section applies as respects every person who, at any time during the financial year to which the balance sheet relates, was its appointed actuary, a statement of the following information—

• (a) whether the actuary was a member of the society or any subsidiary of the society at any time during that year;

• (b) particulars of any pecuniary interest of the actuary in any transaction between the actuary and the society or any subsidiary of the society and subsisting at any time during that year or, in the case of transactions of a minor character, a general description of such interests;

• (c) the aggregate amount of any remuneration and the value of any other benefits other than a pension or other future or contingent benefit under any contract of service of the actuary with, or contract for services by the actuary to, the society or any subsidiary of the society, receivable by the actuary in respect of any period in that year; and

• (d) a general description of any other pecuniary benefit (including any pension and other future contingent benefit) received by the actuary from the society or any subsidiary of the society in that year or receivable by him from the society or any such subsidiary,

together with a statement that the society has made a request to the actuary to furnish to it the particulars specified in this subsection and identifying any particulars furnished pursuant to the request.

• (3) Subsection (2) above applies in relation—

• (a) to the actuary’s spouse or civil partner;

• (b) to a partner of the actuary;

• (c) to any child or step-child of the actuary who is under 18;

• (d) to any person (other than the society concerned or any subsidiary of that society) of whom the actuary is an employee; and

• (e) to any body corporate (other than the society concerned or any subsidiary of that society) of which the actuary is a director or which is controlled by him,

as it applies in relation to the actuary.

• (4) For the purposes of subsection (3) above, an actuary shall be taken to control a body corporate if he is a person—

• (a) in accordance with whose directions or instructions the directors of that body corporate or of a body corporate of which it is a subsidiary are accustomed to act; or

• (b) who, either alone or with any other person falling within that subsection, is entitled to exercise or controls the exercise of, one-third or more of the voting power at any general meeting of the body corporate or of a body corporate of which it is a subsidiary.

• (5) If a friendly society fails to annex the statement required by subsection (2) above to a copy of its balance sheet to which this section applies, the society concerned shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale.

Laying and furnishing of accounts and reports

Laying and furnishing of accounts and reports

78

• (1) The committee of management of a friendly society shall in each year—

• (a) lay before the society, at the annual general meeting, copies of the annual accounts for the last financial year, the report of the committee of management for that year and the auditor’s report on those accounts; and

• (b) send to the FCA and, if the society is a PRA-authorised person, the PRA, not later than 30th June or 14 days before the annual general meeting, whichever is earlier, two copies of those accounts and reports.

• (2) The committee of management of a registered branch shall in each year—

• (a) lay before the branch, at the annual general meeting, copies of the annual accounts for the last financial year and the auditor’s report on those accounts; and

• (b) send to the FCA and, if the society is a PRA-authorised person, the PRA, not later than 30th June or 14 days before the annual general meeting, whichever is earlier, two copies of those accounts and that report.

• (3) Every friendly society shall, as from the date by which at the latest its committee of management is required by subsection (1) above to send them to the FCA and, if the society is a PRA-authorised person, the PRA—

• (a) make copies of the annual accounts, the report of the committee of management and the auditor’s report available free of charge to members of the society at every office of the society; and

• (b) send, free of charge, copies of those documents to any member of the society who demands them;

and that duty shall cease, as respects those accounts, when the society comes to be under the same duty in respect of the accounts for the next financial year.

• (4) Every registered branch shall, as from the date by which at the latest its committee of management is required by subsection (2) above to send them to the FCA and, if the society is a PRA-authorised person, the PRA—

• (a) make copies of the annual accounts and the auditor’s report available free of charge to members of the branch at every office of the branch; and

• (b) send, free of charge, copies of those documents to any member of the branch who demands them;

and that duty shall cease, as respects those accounts, when the branch comes to be under the same duty in respect of the accounts for the next financial year.

• (4A) A friendly society or registered branch is to be regarded as sending a copy of a document to a member for the purposes of subsection (3)(b) or (4)(b) if it makes the document available to the member on a website; and the end date for the purposes of section 119AB(4)(b) is the date when the duty ceases.

• (5) If default is made in complying with subsection (1) or (2) above, every person who was a member of the committee of management of the society or, as the case may be, the branch, at any time during the relevant period shall be guilty of an offence and liable on summary conviction—

• (a) to a fine not exceeding level 5 on the standard scale; and

• (b) in the case of a continuing offence, to an additional fine not exceeding one-tenth of that level one-tenth of the greater of £5,000 or level 4 on the standard scale for every day during which the offence continues.

• (6) If, on demand made of it under subsection (3) or (4) above, a friendly society or registered branch fails, in accordance with that subsection, to make available or, as the case may be, within 7 days of the demand, to send to a person a copy of the annual accounts, the society or branch shall be guilty of an offence and liable on summary conviction—

• (a) to a fine not exceeding level 3 on the standard scale; and

• (b) in the case of a continuing offence, to an additional fine not exceeding one-tenth of that level for every day during which the offence continues.

• (7) In subsection (5) above “the relevant period” means the period beginning at the end of the last financial year and ending with the date which falls 14 days before the annual general meeting following the end of that year.

• (8) The FCA shall keep one of the copies of documents received by it from a friendly society under subsection (1) above in the public file of the society.

Auditors' duties to Commission and related rights

79

Part VII — Disputes

Disputes relating to friendly societies

Determination of certain disputes by arbitration

80

• (1) Subject to the following provisions of this section, any dispute between—

• (a) a member or person claiming through a member or under the rules of a friendly society or registered branch and the society or branch;

• (b) a person aggrieved who has ceased to be a member of a friendly society or registered branch, or a person claiming through such a person, and the society or branch or an officer of the society or branch;

• (c) a registered branch and the society of which it is a registered branch;

• (d) an officer of a registered branch and the society of which it is a registered branch; or

• (e) two or more registered branches, or any of their officers,

shall be determined by arbitration in the manner directed by the rules of the society or branch.

• (1A) Nothing in subsection (1) above or in rules of a kind mentioned in that subsection prevents any person, in accordance with the scheme for which Part XVI of the Financial Services and Markets Act 2000 provides (the ombudsman scheme), from having a complaint dealt with under such a scheme before, or instead of, arbitration.

• (2) An application for the enforcement of an award on an arbitration under this section may be made to the county court.

• (3) An award made in such an arbitration shall, in Scotland—

• (a) subject to subsection (4) below, be final; and

• (b) be enforceable as if it were an extract registered decree arbitral bearing a warrant for execution issued by the sheriff.

• (4) An arbiter who has made an award in an arbitration under this section shall, on the application of a party to such arbitration, state a case for the opinion of the Court of Session on any question of law.

• (5) If the parties to a dispute of a description specified in subsection (1) above agree that it shall be determined by the county court or, in Scotland, the sheriff, it may be so determined instead of being determined by arbitration under this section.

• (6) If—

• (a) a party to a dispute of a description specified in subsection (1) above applies to the society or branch in accordance with the rules for determination of the dispute by arbitration;

• (b) no such determination has been made within the period of 40 days beginning with the day on which the application was made; and

• (c) either party applies for determination of the dispute by the county court or, in Scotland, the sheriff,

the dispute may be so determined.

• (7) If the society has registered branches—

• (a) the period of 40 days shall not begin to run until application has been made in succession to all the bodies entitled to determine the dispute by arbitration in accordance with the rules; but

• (b) the rules may not require a greater delay than 3 months between each successive determination by such a body.

• (8) In this section “dispute”—

• (a) includes any dispute arising on the question whether a member or person aggrieved is entitled to be, or to continue to be, a member or to be reinstated as a member; but