Credit Unions (Amendment) Bill

Clause 8 makes provision for and the definition of deferred shares in credit unions.

Clause 8 also makes amendments to ensure that deferred shares are treated differently to ordinary shares for various purposes.

Deferred shares are described as a distinct class of shares issued on terms set out in documents provided to applicants. Those documents must identify the shares as deferred shares, state whether they are covered by the Financial Services Compensation Scheme and include a term prohibiting repayment of principal except in specified circumstances.

Repayment of these kinds of shares may take place only on the winding up or dissolution of the credit union, where all sums due to creditors are paid in full, or with the consent of the appropriate authority following an application by the credit union.